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Buyer states: “I’m waiting for prices to go down”.
By marionduffy | April 3, 2008
Price is important. But, please, look at the whole picture! Look at all the factors involved in a real estate purchase.
Yes, the price is really important, but so are the mortgage rates. It is possible for prices to go down further and for rates to go up. In this case, the house payment on a piece of property could be the same or even higher than when the price was higher. In his article, The Fed and Mortgge Rates, Bill McCord gives a clear and well written explanation of rates. Real estate mortgage rates are a big part of the real estate buying picture.
Another thing that is so important to remember is that, for most part, real estate is a long term investment. Consider the location of the property, floor-plan, amenities, etc. If you are buying income property, will you be able find tenants easily and how much can you expect to receive in rents?
Even though there are many distressed sales currently on the market, there are some properties that have a lower price for a reason. Is it simply that the seller needs to unload the property now, or is there something less desirable about this property that is making it harder to sell? When you attempt to sell it in the future, will it also be harder for you to sell for the same reason? For example, a home on the view side of the street will usually sell for more than the same home across the street without the view. Even if the non-view house is asking a really low price, you could very well be better off paying more to be on the view side of the street. When prices start appreciating again (and they will), your view property will be even more valuable.
Like any other investment, when purchasing real estate you need to look the whole picture.
Topics: Buyers, Real Estate Prices, Investment Property |
April 3rd, 2008 at 9:30 pm
Hi Marion,
I appreciate your ability to tell it like it is. Home sale prices, interest rates, et cetera, notwithstanding, if someone is buying a home for the right reasons (i.e. a roof over their heads and a place to have the family for Thanksgiving dinner) then the issue of getting “a good deal” should take second place to finding the right home for the long term. I’m sure your clients are thankful for your perspective and good advice.
April 3rd, 2008 at 10:02 pm
Thanks for imposing a touch of common sense to the current nonsense being promoted by our pathetically hysterical media.