It is interesting to see the media, in its many forms, speculating about the real estate market, and in essence driving our economy. Well I stay informed about current events, the national market, and more especially in my community. However there is still buyer reluctance and I have often heard some say "I will wait until the market bottoms out."

If you are one of those buyers and can predict this, I want to retire early, so please give me the winning lottery numbers. Before anyone recognized the shift in the market it happened already, so when you feel as though it bottomed out, it will shift again. Many sellers are just now feeling and realizing what happened, the shift from the seller's market to buyer's market, and buyers traditionally are ahead of the game.

Let us also place this into a logical example. As we all know interest rates are very low, but are slowly increasing.
We will use an FHA style loan 3.5% down and a $1500 deposit. The seller agrees to 6% seller assist and the purchase price of $154,900 so the total mortgage will be $149,478.50 over 30 years.

At a fixed rate of 5.5% the monthly payment, principal, interest, tax, and insurance
$1,253.86.

Now you want to wait and the interest rate increased to 6%, that is only 1/2%, all being the same your payment is now $1,301.34.

Only an additional $47.48 per month x 12 months = $569.76 per year.
Now lets take that $47.48 over the course of the term of the mortgage: $47.48 x 360 = $17,092.80

What would you do with this additional money? Now what would happen when the market shifts again?
If you are on the fence and still waiting for the market to bottom out I hope you the best in predicting the future; but the figures are there and hopefully you will see the savings now.


Peter B. Lavelle
Citizens Premier Real Estate
(215) 396-0500 x 3440
http://www.peterblavelle.com
peter@peterblavelle.com

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