Charleston, SC Posts

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Save nothing by waiting

It's conventional wisdom that you buy low, right?  There are some buyers still sitting on the fence waiting for prices to potentially drop more.  There are many things waiting buyer have not considered.  One will be the rising finance costs when the housing market bounces back. 

I saw an article in Time Magazine that prompted this thought: 

Let's consider interest rates 1 year ago at 5.5% on a $200,000 home, the average in our area.  With a fixed mortgage and a 20% down payment, the monthly payment is $908.46.  Let's fast forward to today. Hypothetically if that home were to have a 5% price drop to $190,000 and the rate rises to 6% when the non existent recession ends.  With the same down payment, your monthly payment is $911.31.   By waiting one year, you increased your payment by $2.85!!! Not to mention you spent one year living in a place you didn't want to be.  Generally, over any given five-ten year period, the average appreciation rate of property has been between 6-8%.  So what are you waiting for?  

Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

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Comment balloon 3 commentsMichele Reneau • February 22 2008 03:25PM

Comments

So true Michelle.

The other point to consider is that potential buyers waiting for the prices to potentially drop more will only know that they are not going too when house prices are rising.

Put this together with the low interest rate and the amount of housing choice at present.

How is it not the right time to buy?

Posted by Alan Langstone over 10 years ago
I like the way that is broken down! 
Posted by Prudential Preferred Realty Butler PA (Prudential Preferred Realty) over 10 years ago

1 year ago at 5.5% on a $200,000 home, the average in our area.  With a fixed mortgage and a 20% down payment, the monthly payment is $908.46.

With the same down payment, your monthly payment is $911.31.  

It might be late and my math fuzzy, but didn't it actually COST the buyer $2.85 by waiting a year, even though the home was priced lower?  Meaning they didn't save anything, but are rather paying MORE now?

Really great article!  You need to submit this to a larger audience to educate more consumers! 

 

Posted by Melissa Marro, Jacksonville Real Estate and Home Staging (Keller Williams First Coast Realty - The Marro Team) about 10 years ago

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