Think price or cost is the only factor you should consider when buying Virginia Beach Real Estate?
The below article by Steve Harney illustrates how Virginia Beach Real Estate buyers need to consider price vs cost.
The one point you need to take away from this post is that low interest rates and price still make it a very desirable time to buy Virginia Beach real estate with or without the tax credit.
The Price Is the Same, It Just Costs Less
by Steve Harney
on April 26, 2010
in For Buyers
Same Price, Lesser Cost
The papers will be full of articles urging homebuyers to purchase a home this week before the Homebuyer Tax Credit expires. The articles will be correct. Getting a home into contract by this Friday, April 30 will enable you to collect on the tax credit.
However, it is not just the tax credit that makes this the best time in a long time to pull the trigger on the home of your dreams. Prices have reached levels not seen since before the housing bubble. The following graph shows that, according to the S&P Case Shiller Pricing Index, home values have fallen to August 2003 prices.
You can purchase a home today at the same PRICE it sold for seven years ago.
And it will actually COST you less!
This blog has been making the distinction between the PRICE and the COST of housing for months now. Price is what you agree is the value of the home. Cost is what you pay every month in the form of a mortgage payment. The cost is a combination of the price and the mortgage interest rate you will pay over the life of the loan.
Interest rates are at historic lows. Interest rates in August of 2003 were over a full percentage point higher than they are today. We can see in the table below that, even though you would pay the same price for a house today, your mortgage payments on a $200,000 loan would be $145.61 less each month
. That is an annual savings of $1,747.32. Over the life of a thirty year mortgage you would save $52,419.60.
What does this mean to you?
If you can, get the home in contract by the end of the week for the sake of the tax credit. But if you miss that deadline, still move forward with the purchase before interest rates rise.
Virginia Beach and Hampton Roads short sales continue to grow in numbers. As of today, Virginia Beach short sale inventory is almost 400 single family and condo/townhomes.