Prices And Rates Make For Clearer Vision
(How do you read the real estate market? With so many intricate aspect of the market it is difficult to decipher which one you should pay attention to.)
A good or bad market will depend on whether you are looking to buy, sell or invest.
The September 29, 2006 article, "Prices, Interest Rates Make Up 20/20 Real Estate Vision," written by M. Anthony Carr of Realty Times, describes why concentrated on two real estate factors and incorporated them into different situations can best help you determine your next real estate move.
"Many real estate prognosticators have been worrying about the slowing of the appreciation rates across real estate markets nationwide, scaring many buyers out of the market. The Office of Federal Housing Enterprise Oversight released its 2nd quarter figures on average housing prices this month and many market watchers jumped on the 'dropping prices' bandwagon."
However, the perceptive buyer will study real estate prices and interest rate adjustments to determine the best time to make an offer on the best available house for the best price at the best terms.
The most recent OFHEO report, "House Price Appreciation Slows," indicated that prices nationally are not actually dropping, but rather the rate of growth has slowed.
"On average, the houses in the 2nd quarter were 10 percent more valuable over the same period last year. So consumers and economists have on their worry hats about the future. Understandably, none of us like to see an investment stop growing; however, for the buyers, this slow in appreciation is good news."
Trying to predict the future of the real estate market is sometimes difficult and often very risky. As a result, it is usually best to buy when your situation dictates it rather than the market. Many times buyers, well, buy because they think the market is right, but their financial situation may make monthly payments, etc. difficult.
But if you are in the right financial situation to buy, the iron seems to be hot enough right now to press into a new purchase.
"Have you been watching the interest rates lately? Bankrate.com has its average 30-year fixed rate at 6.4 percent -- a drop of 3 basis points in one week and the lowest level all year. In addition, for those willing to pay more points, you could get a rate under the 6 percent threshold. Meanwhile, if the prices in your area are about to flatten before beginning their next cycle upward, and you MUST buy now, your waiting may have paid off -- if you jump over the fence of indecision and get a contract written now."
Rates were as high as 6.8 percent earlier this year. That means that a drop of basis points since that time could essentially save a consumer hundreds or even thousands of dollars on their mortgage loan.
To put into further perspective, the current 6.4 percent interest rate would create a principal/interest payment of $625.51 on every $100,000, which is about $25 less per month than when the interest rate was at 6.8 percent.
Now apply this model to higher loan amounts and you will be saving around $100 per month. That's fee cable!
"If you're waiting for prices to hit bottom, it could happen while you wait or you could create your own 'bottom' price by making an offer now before interest rates start their upward climb once again. Get the house you want for the price you want at today's interest rate."