If you are thinking about selling or buying a home right now you obviously have to be wondering how today’s economy, interest rates and local real estate market will affect your bottom line. There is not one answer for everyone, and as when any of us invest in the stock market, it is the long term return that should be our focus.
If you are thinking about buying a home now every investor and real estate analyst has stated that this is absolutely the best time. As with most markets, Fort Mill and Tega Cay SC are considered to be a “buyers market”. What does a “buyers market” mean?. It means that buyers are in the driver’s seat. There are a good number of homes on the market which gives you plenty of available inventory to see and choose from. Depending on the location or community some homes are now selling at 2005 pricing. The other side of the equation when looking at purchasing a home is interest rates. Interest rates are changing daily and are still considered to be low when compared to years past. If you are considering a home purchase this is NOT the time to get left behind.
Home sellers how about you? For sellers who have more than three years equity this can be a perfect time to find value in your next purchase. Move up buyers who have a solid amount of equity on their home can still sell for a reasonable profit and purchase in a market that is offering tremendous buying opportunities. Again, this is NOT the time to wait. We are still seeing price reductions and a steady inventory. To sell a home in this market you have to win the beauty contest and you need to be the best value in your price point. Be realistic about your gain today and look forward to the future growth of the investment you are buying at a discount price.
Consider the following points from Elizabeth Weintraub of About.com:
Don’t forget the impact of Interest Rates. Which way are interest rates moving? If interest are near an all time low and the rates begin to inch upwards, waiting could cost you more than you would think:
FACT: Each ½ point increase in your interest rate gives you $25,000 less in purchasing power.
FACT: Each 1 point increase in your interest rate gives you $50,000 less in purchasing power.
FACT: Each 2 point increase in your interest rate gives you $100,000 less in purchasing power.
If you put down 20% and qualify for an 80% loan, here are your principal and interest payments on the following purchase prices:
• $425,000 sales price, at 8.25% interest, your payment is $2,554.
• $450,000 sales price, at 7.75% interest, your payment is $2,579.
• $475,000 sales price, at 7.25% interest, your payment is $2,592.
• $500,000 sales price, at 6,75% interest, your payment is $2,594.
• $525,000 sales price, at 6,25% interest, your payment is $2,586.
The payments are almost identical. However, the home you can afford to buy at 8.25% is $100,000 less than the home you can afford to buy at 6.25%. If you wait for prices to further decline, the perceived value could be lost due to higher rates.
Yes, now is a good time to buy or sell a home. Give me a call to discuss your specific needs and goals.
Carmen S MillerC: 803-322-3479 www.carmensmiller.com www.homesfortmill.com