Can you believe it is September already? As the kids are back to school and fall approaches, we continue to get the same question everywhere we go: How is the real estate market? Well, here is some information for you, and it's a lot different than what the media would have you believe.
Is now a good time to buy? YES!
And here's why... If you bought a $200,000 home (and for the purpose of this illustration got a $200,000 loan) and the home's value drops 10% in the next year, the math is easy - you just lost $20,000. BUT, if you obtained a loan today for that house at 4.25% interest, and if that same loan 1 year ago was 6% interest, then the difference in the payment is a lot LESS if you buy the house now. ($200k @ 4.25% = $984 / $200k @ 6.0% = $1,199) for a difference of $215 every month. Over 30 years that difference is a whopping $77,400! One thing we have been assured of is that interest rates have to and eventually will be going up as the economy improves.
Did I mess up by missing the Obama Tax Credit? NO!
At the end of April (when the tax credit expired) rates were hovering around 6%. So, as stated in the first example, you'd be spending $77,500 more if you bought a house on April 30th vs. today!
Here's another way to look at it...
