Realtor Magazine's latest edition had a great article about 4 questions that are on most buyers and sellers minds today. I wanted to touch on them concerning the Flagler & Palm Coast areas here in Florida.
- Why are the prices of homes substantially in today's market?
- A: Homes typically have appreciated at a rate of around 4% to 5% per year and it's not unusual to see values fluctuate during the first 4 to 5 years of ownership. During the boom a few years ago, values had appreciated at rates of much higher than normal. We are at a point now, where the market is correcting itself.
- This becomes the situation when it too many properties become available for sale. Typically an area should be around a 5 to 6 month supply. We are currently around a 12 to 14 month supply for residential homes available for sale.
- Where are prices headed next?
- A: This is probably the biggest question on most people's minds. It is difficult to tell right now, but there are indicators that things will begin heading in a much better direction than the last few years. Typically the number of sales and prices have reacted about a year differently than one another in the area. We are seeing the number of sales beginning to "flatten out" which is a very good indicator. We are also seeing Palm Coast and Flagler County contunue to be a significant growth area and is projected to grow 10% over the next 4 years according to Florida Trend. Performance this year will definitely be one to watch. But if you are ready to buy, this is a great time to act especially with the historically great interest rates often time in the 4% to 5% range currently.
- Should I buy now?
- A: Most would think I'll just say "yes" because I'm a Realtor. But truth be told from a buyer's standpoint, this is definitely a great time to buy. Great prices, good negotiation position, great selection, and great interest rates. The conditions are perfect for buyers in the area.
- Is owning a home really a great investment?
- A: I've been a renter and a homeowner. I'll take homeownership every time. Right now, monthly rents can be right around the same if not more than monthly mortgage payments. Therefore, I am getting no financial benefit to paying rent each month in comparison to making a mortgage payment and owning. Ownership allows you the tax benefits of deductions for interest and property taxes. It also allows you the ability to sell later on and most often earn a profit to use towards another property if you must move. It is also something you can stay in for a long period of time, pay your loan down, and take the cash later on when selling possibly at retirement age. The most important thing with ownership is knowing what you can afford (pre-approval from a lender and disciplined personal budgeting).
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