Now that the Election is History, Is this a good time to buy?

Real Estate Agent with Keller Williams Realty

Now that the election is history, is this a good time to buy?  Here are the factors to consider:

1.  Interest rates - Right now, Interest Rates are still at historic lows.  A .5% change in Interest Rate affects your payment the same as a 6% price increase.  For each $100,000 of loan, a .5% rate increase raises the payment by approsximately $30 per month.  Similarly, a $6,000 increase in the loan raises the payment by approximately $30 per month.  So, home prices will have to drop by 6% for every .5% interest rate increase.  That's not likely to happen.

2.  Housing demand is up!  You know the drill - Increase Demand and keep Supply low and prices rise.  Home Builders don't have enough lots to build right now to satisfy current Demand. Banks are not lending to builders to build large numbers of spec homes.  

3.  Inventory is DOWN.  Some have been waiting to see what happens before moving into the market.  They may have already waited too long to get the best deal.

4.  People need a good place to live, regardless of the political environment.  If the economy stays on current trend, we will be back to normal in a year or so.  Then, see #1 above.

5.  Real Estate has always been a long-term play - Don't look at price trends by weeks or months, look at 5 years at a  time.  Look at the number of new households being formed and ask yourself, "Where are they going to live?"

The best bet, in this REALTOR's opinion, is to buy the best home you can afford, put renters in your existing home if you can qualify for two loans.  If not, find out if you can breakeven and get out.  Remember, the more expensive homes appreciate faster than cheaper homes.  So, if you wait for another $5,000 in equity so you can sell, the home you want to buy will likely increase by more than that.  Get moving!

Comments (1)

Daniel J. Brudnok, REALTOR
Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License #RS-225179-L / Delaware License #RS-0025038 - Downingtown, PA

Hi Ellen and Doc,

I have in the past found that the holidays has been a great time for real estate......and so far so go......I hope the same for you,

Nov 08, 2012 11:20 PM