I recently attended a Board of Realtors seminar which was quite informative. The presenter used slides representing numerous points which represented return on investment, cost analysis using today’s low interest rates, percent change in sales by price range, mortgage delinquencies and foreclosures by period past due and home price expectation survey to name a few.
Of these the ones that had the greatest impact on me were, return on investment, which demonstrated that from January 1st, 2000 to September 1st, 2010, the Dow, S&P and NASDAQ all showed losses as compared to Real Estate which demonstrated a significant gain. This data was drawn from MSN Money.com, Case Shiller.
The other simpler slide which every buyer should see represented a $250,000 loan using last years and today’s interest rates demonstrating a cost savings, difference in mortgage payments of $240.21/month for principal and interest
And finally the third most interesting slide demonstrated that today’s home prices would make a significant drop in 2011 and rebound to today’s price in later 2012. This was generated from Macro Market Home Price Expectations Survey. So if the seller wants to wait it will be almost 2 years just to get to today’s price again! It was further explained that the surge of foreclosures expected to hit the market by early next year will take a significant chunk out of home values. However, if a buyer is planning on staying in a home for more than 2 years they should begin to see appreciation by that time. The real gain for today’s buyer is the significant savings from today’s low interest rates which would not be available once the market rebounds.
In essence, there is no better time to buy than now and into the next year. And no better time to sell then in the next 90-120 days.