I know what you’re thinking: no matter what the marketplace is doing, those slick realtors are going to try to convince you that it’s in your best interest to buy or sell since.. that’s how they make their money. As far as many realtors go you’re absolutely right. However, I would hope that any of you who know me know two reasons why I wouldn’t fall into that category: 1. I don’t think the readers of this blog are that stupid and would believe me if I were blowing smoke and 2. I don’t bullshit. I am straightforward to the point of bluntness sometimes; it’s just the way I’m wired.
So, here’s why UNLESS YOU ARE DOWNSIZING, now is the best time to buy. Interest rates for qualified buyers are close to 3.5 %. Unbelievable. Now, time for a math lesson. When the market has dropped (like now), it means that your current home, which, for argument’s sake, let’s say WAS worth $600,000 three years ago and is now worth $500,000. That means that it’s worth about 5/6 of the old value (83%). Well, what about that $800,000 house you wanted to buy three years ago–now, it’s only worth 83% of that: $664,000. So, if you sold your house and got $100,000 less than you would have before, but you SPEND $136,000 LESS than you would have, your net gain is $36,000, which will cover your closing costs and then some. Think about it.
Image courtesy of Freedigitalphotos.net, Stuart Miles