Question: Why should I buy a house now when home prices may drop in the future?

This is a great question. The media have generated so many stories about the “declining” real estate market that some consumers are concerned about buying real estate. Despite what you’ve read in the newspaper or heard on the national news, there are many reasons to buy a house now rather than later.

1. Who knows what the future holds? No one can predict with certainty whether prices will fall, remain steady, or rise. In many markets, the inventory is up with properties on the market for longer periods of time, but the prices are still not decreasing to the degree predicted by some analysts.
2. When you buy a home you get to build ownership in a property. If you’re paying rent, all that money goes into someone else’s pocket, instead of equity in a property you own.
3. Interest rates are relatively low right now – you may not want to risk a rise in interest rates. Did you know that for every point the interest rate increases, you have to buy 9% less house to keep your payment the same? For example, if you were to borrow $600,000* at 6.25%, your monthly payment would be $3694. If you borrow at 7.25% your payment would increase to $4093. At 7.25% you would have to purchase a house for $58,500 less than at 6.25%. Do you want to settle for a cheaper house? Or the house you really want?
4. With a professional real estate agent who understands then negotiation process, you can get great deals – perhaps significantly below the asking price. This is especially true when your offer is the only one on the table.

So don’t wait for the real estate bubble to burst – that time may have already passed. If you’ve been thinking about buying, NOW may be the right time.

*For a $750,000 priced home with 20% down.

Spring Market Update

The spring market is well underway. NOW is the time to get your house on the market if you’ve been thinking about selling your home.

After a quiet spring market in 2006, the 2007 market is showing improvement in terms of both the number of properties sold and pending sales. Between January 1st and April 30th in Sudbury 87 single family properties went under agreement (UAG) and 59 homes sold*. During the same period in 2006, only 59 single family properties went under agreement and 37 sold. This is a 43% increase in UAGs and a 59% increase in the number of properties sold! Most certainly the signs of an improving market.

Inventory levels are also down since one year ago. Today approximately 135 single family homes are on the market, down 16% from 160 on May 1, 2006. This means less competition for sellers and, coupled with the increase in sales, a more positive future market outlook.

*Data Source: MLS Property Information Network, Inc.