REAL ESTATE

Do I Buy?

Whether to purchase a home may be one of the biggest decisions to make in one’s lifetime. For first time buyers, which are usually in their late 20’s to early 30’s, the process can be very harrowing and nerve-wracking.

The current housing market conditions do not favor the buyer, although recently the prices have moved slightly downward in many locations.

Low inventories and high interest rates, however, have kept prices elevated, and many sellers remain stubborn regarding the selling price. The low inventory issue basically exists due to the fact that homeowners do not want to “sell” their 3% mortgage, and be forced to purchase another property at 7% loan rates. This issue will most likely persist as long as interest rates remain high and/or inventories low.

The current conditions favor “all cash” buyers, as they are unaffected by the interest rate, and many owners have sold their homes in more expensive areas, then relocated to less expensive locations to take advantage of that concept. This, in turn, has propped up prices in those less expensive areas, as the cash buyers have bid up prices.

The decision to buy a home may come down to whether one plans on staying for a long period of time, or not. Those who plan to settle into a home for decades, and have sufficient down payments, should pay more attention to the price of the home (which will never change), and the property taxes (which periodically rise), rather than the interest rate (which always changes). Homes can be refinanced when interest rates decline.

Current conditions may not favor those who are desiring a “starter” home, or are only looking for the short term purchase. Always confer with your financial advisor and an experienced agent prior to making this important decision.

In Chapter 7 of our publication, When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), we take an in-depth look at the buying and selling process, with detailed tips for the inexperienced.

You can also visit the website www.augustassociatesllc.com, for home values, listings, and professional assistance.