Ann Arbor Michigan Real Estate prices have fallen - one question I hear a lot now is:  "Should I buy now or wait a year"  I received this email from Bob Yupko at First Equity Financial Mortgage in Chelsea, MI today and he makes a good point for buying now.  Here is his email:

To My Favorite Realtors-

I had a loan application in Ann Arbor the other day. The client started off by
asking me if he should buy a home now. He felt that the Pfizer closing would
push values lower, and that if he waited 10-12 months he could buy a similar
home cheaper.

First, I pointed out that with Google, Toyota and Hyundai coming, the net loss
of jobs would be much smaller than the headlines. There is also a sizeable
contigent of Pfizer employees who will stay and start their own firms. But I
accepted his logic and asked him how much he thought prices would come down. He
said maybe as much as 10%.

I could have argued with him, but I didn't. I just used the 200,000 house price
he was paying and did the following on a yellow pad;

Current price 200,000 with 20% down gives mortgage of 160,000 at 6.375% for
payment of 998.19

Projected price of 180,000 with 20% down gives mortgage of 144,000 at 7.5% for
payment of 1006.87

The Federal Reserve is expected to start raising rates later this year, and if
he waits for 10-12 months, that is the rate I project he will pay. It may be
higher (rates always go up faster than they come down).  So even if prices come
down, he will be paying MORE with the expected rate increases. And if prices
don't come down as much as he expected, he'll really get hit. He proceeded with
the transaction.

Hope this is helpful.


Bob Yopko
FIRST EQUITY RESIDENTIAL MORTGAGE, INC.
310 North Main, #201 (in the Clocktower)
Chelsea, Michigan
800-557-0270