Little did I know when this pandemic hit that it would be a first for us in many ways. The biggest surprise to me, however, is the positive effect it has had on real estate sales!
Last week, we talked about the fact that this is one of the best Seller’s markets we’ve seen in years. Check my website, www.FrankDiLauro.com, for details.
However, this is the first time in my nearly 42 years (licensed August, 1978) in real estate that it is ALSO a very good time to buy. The reason, simply enough, is that interest rates are the lowest in our recent history. This morning, in fact, I saw an ad for a 30 year fixed rate loan with no closing costs at a rate of 2.75%! By reference, I mentioned getting my real estate license in 1978. At that time, interest rates were over 9.0%, and within about 3 years, shot up to 15%. These current rates are absolutely incredible!
So, what does that mean to you as a buyer?
Well, if you believe the market will stay either the way it is or there will be more growth, you need to buy now, before prices and interest rates change.
If you believe as some do that prices are unusually high because of reduced inventory, you may want to look at little closer at your options. There are predictions that it is possible that our home values may drop as much as 4-5% in the next year. So, does that mean you should wait to buy? Keep in mind that interest rates are currently at 2.75%. Let’s assume you are considering a $600,000 house and getting a $500,000 loan. The monthly payment on that loan is $2,041.21. If you wait a year and prices drop 5%, or $30,000, your loan would be $470,000. However, the interest rate may change. For example, last year interest rates were at 4.0%. If they go back to those levels, your new payment would be $2,243.30, or over $200.00 HIGHER than if you bought now at the higher price.
So that’s why we feel that this is not only a great seller’s market, but also a great buyer’s market!
As always, the best market is always the one that works for you.