This information came straight from Fox Business, and in this article it states very clearly that "Even if real estate prices go down, interest rates may go up", which will nullify any gain you would hope to obtain from any price decrease.  No one can predict the market and waiting could be the worst thing an investor can do.  

Other real estate "Investment 101" bullet points:

  • No one knows where the bottom of the market is until it is on the way back up.  
  • Go for the long haul - Rarely do people increase their wealth by owning property for short periods of time.
  • All investments fluctuate in value over time.
  • Long-term investing in cash flow-producing assets like real estate is the way to go.
  • In the long run, say 10 years down the road it won't matter that there were price fluctuations in prior years, it's the overall equity that investors earn their equity.
  • Don't be concerned about waiting until prices inch down a few percentage points, as stated because if interest rates go up from where they are then the wait was not beneficial.

  • Buy a property to live in as your personal residence and change it to a rental.  Owner occupants can get better financing and can put down a smaller down payment if needed.  Moving out in a year or two into another personal residence that can become a rental property a couple of years later.  


Jane Grant is a licensed Real Estate Broker in California, DRE 01109492

 

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14 Comments on Even If Real Estate Prices Go Down......Interest Rates May Go UP

APR
24
2012
623,912 Points 43 Featured Posts Outside Blog Called Shot Master

Jane, based on your Temecula CA real estate market reports, your area, like so many, appears to be on the upward trend as to values.  The only thing we know for sure about the current real estate market is that mortgage interest rates are still at their lowest in history.  Did we reach the "bottom" of the values in real estate?  In many areas, it's a strong possibility, based on the current statistics, low inventory and very quick marketing times.  
2:52pm • #1
878,303 Points 74 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Jane, That is so true.  Those buyers sitting on the fence waiting for the perfect moment to make their purchase may only end up paying more than what they think they might save by waiting. 
6:28pm • #2
1,013,694 Points 4 Featured Posts

It interest rates would take a bounce it would probably make buyers start jumping off the fence.
7:21pm • #3
APR
25
2012
983,603 Points 57 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Jane, GREAT information, and surely this interest rate cannot stay this low for much longer!   I think that is why we are having a buying frenzy in Denver right now!
6:13am • #4
211,716 Points 3 Featured Posts Attended Rain Camp

Great points Jane, the focus on short term prices is creating a generation of real estate speculators not investors.

Real estate has always been (well almost always) considered a long term investment and the interest rate has more impact on long term cost than purchase price.

If you need proof, see how much interest is paid over the course of a 30 year loan and it's at least double the principal balance.
11:48am • #5
818,377 Points 7 Featured Posts Outside Blog Called Shot Master

We sure have had a long run with these super low interest rates, and you just know they can only go up.
8:09pm • #6
326,309 Points 4 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp

If we have not yet hit bottom we are very close to it here in Temecula CA. BUY NOW!
9:38pm • #7
APR
26
2012
1,064,894 Points 12 Featured Posts Outside Blog

Jane, That is great information!  Great post and important for buyers to understand! 
9:29pm • #8
APR
28
2012
584,946 Points 2 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Hi Jane,

I just stopped over to your facebook page as well, that's how I ended up here.  Great blog, great information.  I hope you're okay that I'm going to share this with my facebook as well.
3:50am • #9
543,381 Points 13 Featured Posts Outside Blog Called Shot Master

"No one knows where the bottom of the market is until it is on the way back up." 

    What a great statement - and when people realize that we are at the bottom, there will be a Buying Frenzy.
7:12pm • #10
APR
29
2012
1,167,571 Points 159 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Great post, Jane.  Suggested as there is so much sound advice here.  Yes, it seems that the interest rates have a much larger impact than the home price changing a bit.
2:52am • #11
MAY
01
2012
596,286 Points 70 Featured Posts Outside Blog Called Shot Master

Jane - YEP!!! That is an absolute given.  While we (Realtors & MLOs) may not know what the market will be like in a year, we do know that rates will rise.  It is absolutely inevitable.  Waiting to buy when you can afford to buy now is just a bad business decision.  JMHO  :)
9:49am • #12
MAY
02
2012
493,057 Points 12 Featured Posts Attended Rain Camp Called Shot Master

Jane, you speak words of wisdom and experience!  The bottom line is that if the circumstances and numbers work for individual buyers, it is a great time to purchase!
1:36pm • #13
567,604 Points 77 Featured Posts Outside Blog Called Shot Master

Jane--I love your points. Good information to share. Bottomline...no one can time the market!
2:00pm • #14

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Jane Grant - Temecula Home Search, Temecula Homes, Temecula, California (Jane Grant, "Temecula Homes", Southwest Real Estate) Rainmaker_large

Jane Grant - Temecula Home Search, Temecula Homes, Temecula, California

Temecula, CA

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