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Is it a good time to invest in real estate?

By
Real Estate Agent with Solid Source Realty GA

Is it a good time to purchase your first home or upgrade to a larger home?  Yes, there has never been a better time to purchase real estate.  If you believe in the adage "buy low and sell high", then now is the time to buy.  Property values have declined to the lowest point in years and interest rates are still extremely low.  Many buyers are still on the fence and waiting for prices to drop even further, but they run the risk of higher interest rates and larger down payment requirements.  This should be reason enough to start buying up as much real estate as possible.  Many people do not realize that even a slight increase in mortgage interest rates can offset a large drop in home prices.  For example, in parts of Cherokee County, Georgia, the average home sales price was $216,985 in December 2008.  See the chart below to see how a decrease in Cherokee County home prices and an increase in interest rates would affect your monthly payment:

 

Buy Now or Wait?

Scenario 1:

Home prices decrease 5%

Interest rates increase 0.5%

Scenario 2:

Home prices decrease 10%

Interest rates increase by 1%

Home Price

$216,985

Home Price

$206,137

Home Price

$195,289

Interest Rate

5.0%

Interest Rate

5.5%

Interest Rate

6.0%

Monthly Payment

$1,164.82

Monthly Payment

$1,170.42

Monthly Payment

$1,170.86

 

The time to buy a home is now!  No one knows when home prices will begin to increase or when mortgage interest rates will rise.  It could be tomorrow or next year, but do you really want to miss this unbelievable opportunity?