Buying Low, In More Ways Than One!

Why do I think this is a great time to buy?

Let me use the block where I live as an example of the difference that timing can make.

There are some sales on my block here in DC that illustrate how it works.

In May of 2002, I sold a house across the street that set all records on the block when we found a buyer willing to pay $440,000.  Then in 2005, they decided to move.  The buyer's agent told them she thought it was worth around $750,000.  Another agent suggested he could get $885,000, a wacko price.  And he did, although it involved some slight exaggerations in the property condition category. But hey!  It was 2005.

Then, a couple of weeks ago, the house across the street, similar in every way except it was in much better shape, settled for $674,900. 

But wait!  There was another big difference.  Interest rates. 

In April of 2005, they were around 6%.  When the recent buyers bought their house, the rates were around 4%.

So here's what it looks like in terms of what you pay every month.  Let's assume that both buyers put down 20%.  Here's how it works:             

2005 House:  Price $885,000, down payment $177,000, monthly mortgage payment $4,245

2011 House:  Price $674,000, down payment $134,980, monthly mortgage payment $2,578

So you need a lot less to buy the place, and it costs you a lot less per month to live there. 

Oh, and the last rental on the block went for $3200 a month.

And this doesn't even take into account the tax savings which, if homeowners nationwide are lucky enough to continue to write off, will mean the place will cost you even less to live in.

So why is this a great time to buy a house?  If  you need someone to make it even clearer, contact me!

 If you are planning a move to or from the Washington, DC area, I can help!  I am licensed in the District of Columbia, Maryland and Virginia.  You may call, email or text me at: 

Housepat@mac.com

202-549-5167

 

 

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