If your friends said you need to wear shorts and flip flops in the snow to be cool, would you be “foolish” enough to believe them? What I find puzzling in my travels is the amount of people that listen and are guided by what they hear in the news media. This past Friday was April fool’s Day and New Englanders were blessed with a snow storm. Yes, blessed, for it was not a tsunami, a tornado or hurricane. I feel as though we must always look for the silver lining in any situation we come across. While surfing the internet one can plainly see that the housing markets are being halted by what is being reported these days with the doom and gloom of whether it is time to buy or not.
As a mortgage professional, as well as an investor in real estate, the goal is always a buy and hold. In the case of buying a home to raise your family, you would purchase your home with the intent to own it for a period greater than 7 to 10 years which would shield you from the month to month movement of the markets and you could focus on the long terms gains. We all know that in some areas of the country we are going to see a decrease in home values, while in other areas we will see an increase. Here’s the catch, if you think you can catch lightening in a bottle…take the chance a home will drop 5, 10 or even 20% over the next year and hope that mortgage rates stay below 5%. This is highly unlikely as the economy begins to build steam and move forward. If rates move 1% higher, which is very likely, this will cost you $50,000 or greater in buying power. For a home that is priced at $450,000 at a rate of 4.875%, is equal to a home priced at $400,000 at a rate of 5.875%. So by waiting, you have lost time in the market place. We do know rates will climb, that is certain, home prices in this immediate area will stay relatively flat over the next year and will. In general, the economy is based on speculation on what economist think might happen. Across the country, the average home price will drop. Buyer Beware; there are always deals to be had, and now is a time where you are getting both low rates as well as low house prices. If your intent is to buy and invest for the future, now is the time. If you believe you can time the market and make a quick buck by flipping, you are in the wrong place.
Bottom line…if rates go up by 1.00%, which they will, it will do no good to wait to see if house prices drop in order to get a better deal.
Don’t be an “April” fool…now is the time to buy!
Bill Nickerson
Vice President Mortgage Network
179 Great Road Suite 214, Acton MA 01720
978-399-1313
Providing Mortgages Since 1991
NMLS # 4194
Commercial Residential Reverse FHA/VA
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