Low Interest Rates Make It A Good Time To Buy Real Estate In Big Bear

I can’t think of a single time when a Realtor  was asked if this was a good time to buy a home in Big Bear and the agent responding by saying no.  If as a Realtor, I had a crystal ball,  then there may have been times when I may have said “No, This is not a good time to buy in Big Bear”   As of now, I don’t have that crystal ball, but if asked if this were a good time to buy in Big Bear, my answer would be yes and here’s why.

Interest rates are at all time lows and while everyone expected them to rise after the last Presidential Election, they didn’t.  In fact, the interest rates have fallen even lower since the elections.  Let’s take a look at how these low interest rates affect your buying power today.  Then we will take a look at what will happen to your buying power when they increase.

For this discussion, we found a really nice cabin in Big Bear that you were able to buy for $250,000.00  You are putting 20% ($50,000.00) down and your interest rate is locked in at 3.5%.  Based off of my calculations, that should give you a payment of $898.09 plus T&I for 30 years.  Take that same home in Big Bear, same price, same down payment, but the interest rate is now 5.5%.  That 2 point increase in the interest rate is going to increase your payment to $1135.56.  That’s a $237.00 increase over what it would cost you today with the lower rates.

In order for you to buy that long awaited weekend get-a-way cabin in Big Bear and keep your payment as close to the $900.00 a month payment, you would lose $51,000.00 in buying power  Based off of my calculations, for you to have a house payment of $891.43 plus T&I for 30 years, you would not be able to spend anymore than $199,000.00 if the interest rate was 5.5%.

Now let’s be honest, 5.5% interest is not a bad rate.  I’m sure that there are a number of you who can remember when the interest rate was in the double digits. But who wants that!  We all want the best bang for our buck.  So, is it a good time to buy you home in Big Bear?  Based off a few quick calculations, I hope that I’ve been able to prove to you that the answer is YES!

Give me a call at 909-436-8043 or shoot me a email at tony@tonycard.com if you have any questions.  I’m looking forward to working with you with all of your Real Estate needs in the Big Bear Valley

Tony Card