Even With Prices Increasing, It's Still a Deal, and Here is Why

Buyers!  This message is for YOU!  Let's talk about the market. 

I am betting that you have been seeing prices jumping.  As a Realtor, I am seeing the same thing.  And, I am seeing buyers that are thinking twice all the sudden about being in the market.  Are you one of these buyers?

Maybe you are thinking..."did I miss the boat?  This house I was looking at last year, has gone up $10,000!!  I don't know that I can take the plunge now."

Maybe you think..."well, prices go up and then prices go down.  I am going to wait for them to come back down."

Or perhaps..."man, I don't know.  I am not seeing the inventory I used to.  Maybe this is why prices are going up!"

Well...let's talk about this. 

Reasons to buy right now:

1) Prices have not come up that much, YET.  Yet is the key.  Prices are expected to jump pretty significantly in the next 3-5 years by almost all measures. They are not going to come back down!

2) Well, if you don't buy, you are going to have to rent.  Don't get me started on why it is a bad idea to rent.  As an investment property owner, I love my tenants, but I feel bad for them!  Rents have literally gone up 15% in the past 2 years.  And as a renter, you are throwing your money away!

3) The tax benefits.  This is a huge one that not enough agents really share with their clients.  Now, as a caveat, I am NOT a tax professional nor am I a CPA.  But I can tell you that the interest you pay on your mortgage is tax deductible for most home owners.  For instance, you buy a $200,000 home and put down the minimum 3.5%, you have a mortgage of about $192,000.  Over that first year, you will pay about $6600 in interest and about $3600 in principle.  That $6600 is tax deductible.  To explain that further, let's say you make $46,600 in salary that year.  Well, instead of paying taxes on $46,600, you would pay taxes on $40,000, saving the average person about somewhere between $1300 and $1800, depending on your tax bracket.  Whew!  Remember, I am NOT a CPA and this is a hypothetical example!

4) BIGGEST REASON:  Interest rates!!  Come on now, I know you have seen the rates hovering around 3.5% for a 30 year fixed.  They are starting to tick up a tiny bit, but still HISTORICALLY low.  Here is the deal.  You may pay more for a house this year because of the lack of inventory, and it is true that prices are coming up.  BUT....the premium that you pay now, will more than be made up for by the lower rate on your loan.  Simple math.

Questions?  Just ask!  Thanks for reading, have a good week!