IS IT POSSIBLE THAT HOME PRICES WILL CONTINUE TO FALL IN MONTEREY COUNTY
Good question and one that is on the mind of home buyers in Monterey County. Should I buy now? Should I wait? Does buying really make better sense than renting?
I wrote a recent post on saving for a down payment to buy a home:
While finances are huge, and I educate home buyers on the importance of the financial part of it, that should not be your only deciding factor if your finances are in place.
While price is the major concern for anyone selling a home, COST should be the primary concern of a buyer. Taking into account all of your monthly expenses in owning that home. Consider not only the price of the home, but what will your payments be? Property taxes? Insurance? Maintenance?....
Waiting for prices to bottom out might not be a good idea..with low interest rates, the cost will be lower over the life of the loan than it would be if you wait, and interest rates go up...it is all relative. I see that prices in Monterey County are not falling drastically. The experts are projecting that interest rates will increase over the next several quarters. Meet with a mortgage professional to help determine what an increase in interest rates will do to your buying power.
With prices down, one also wonders about how long it will be before they see any appreciation on their investment. It is important to have your REALTOR show you the pricing trends over the last several years. Pricing trends vary by market...you can't look at pricing in Clovis and compare them to what is going on in Pebble Beach. Nationally there are indications that prices will go up by about 0.5% in 2011. Experts are predicting that prices will start increasing now in the second half of 2011. This would be a cumulative appreciation of more than 10% between now and 2015.
DOES BUYING REALLY MAKE MORE SENSE THAN RENTING?
If one wants to rent a decent 3 bed 2 bath home on the Monterey Peninsula, you can count on between $2,200 per month and up depending on the location, age, condition. If you have a down payment and reserves that can buy you a home and your expenses would be the same...by all means buy a house!! The tax advantages are in your favor. Which leads me to tell you to discuss this with your tax professional.
Think about the reasons you are considering buying a home. The Fannie Mae National Housing Survey shows the four biggest reasons people buy a home...believe it or not, none have to do with money. The reasons are the following:
1. Desire to have a place to raise and educate children
2. Desire to have a safe place for their family
3. Desire to have plenty of living space
4. Control over the space
There are alot of positive reasons to buy vs. rent. What are your reasons? What are the non-financial reasons you want to own? What will you gain from home ownership? These answers may be the reason you decide to purchase, or not.
The most important factor in all of this is that the cost of your home monthly will not change even if prices continue to depreciate. (which they shouldn't). Don't allow money to be the only factor in making a decision that is right for you.
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