Real Estate: Best Time in History to Buy

Don’t believe the hype. While negative reports of a “housing slump” sell newspapers and get television news ratings, positive stories about buyers are being overlooked. Home purchasers should realize that price is only one factor buyers should consider in determining the right time to buy.

Buyers are enjoying low interest rates, a high selection of homes, and affordable prices. Have prices hit bottom? Probably not. But that shouldn’t matter for most that plan on living in their next home for more than a few years. Let’s look at a few factually based scenarios for a home buyer for the same home:

November 1999
Sale price $200,000
30 year fixed, 90% loan - $190,000 loan amount
Interest rate 8% = Principal & interest payment of $1,394
939 homes on the market in Livingston County at that point to choose from

January 2005
Sale price $250,000
30 year fixed, 90% loan - $225,000 loan amount
Interest rate 6.625% = Principal & interest payment of $1,441
2350 homes on the market in Livingston County at that point to choose from

November 2007
Sale price $190,000
30 year fixed, 90% loan - $171,000 loan amount
Interest rate 6.75% = Principal & interest payment of $1,109
3081 homes on the market in Livingston County at that point to choose from

January 2008
Sale price $187,000
30 year fixed, 90% loan - $168,300 loan amount
Interest rate 5.75% = Principal & interest payment of $982
2901 homes on the market in Livingston County at that point to choose from

If forecasters for interest rates are correct, July 2008 could look like this:
Sale price $182,000
30 year fixed, 90% loan - $163,800 loan amount
Interest rate 6.50% = Principal & interest payment of $1,036
3000 homes on the market in Livingston County at that point to choose from

As you can see the same home now vs. 6 months from now could mean $54 less on your monthly payment. Look at January 2008 vs. November 1999…There are three times more homes to choose from and interest rates are 2.25 points better now! Let’s face it, this may be the best time ever to purchase real estate in our area.

Please call us for a FREE consultation about your possible home purchase at 810.229.7000.