Interest Rates – Take That Leap of Faith
Posted by Lisa Udy on Monday, February 14th, 2011 at 11:30am.
There
are many indications these days that the market is slow. Sales are
down from previous years and that is driving prices down. Some
markets are seeing fluctuations more than others, but overall, real
estate is slow.
What does this mean for you? If you are a seller that doesn’t need to sell, wait a few months to see what happens next. If you are a seller that needs to sell, find an expert in your neighborhood and get advice on pricing and staging, and above all - be realistic.
If you are a buyer, what are you waiting for? For as long as there have been investments, there has been the fundamental rule of “Buy low, sell high.” In real estate, I haven’t seen a better “buy low” time. I’m convinced that the 4th quarter 2010 and the 1st quarter 2011 will be the bottom of the market when we look back in a few years. Only time will tell, but if you are looking to purchase in the near future, now is the time to get started.
I understand the news is bad, the inventory is low, and your family and friends are telling you to wait for more “certain times.” In my opinion, “certain times” bring higher prices and higher interest rates.
I read something a few weeks ago that said, “interest rates need to jump, for buyers to realize that there is something to miss”. I hope this isn’t the case but I have a fear it may be.
If you believe in real estate as a long term purchase and you need a home – now is the time to take that leap of faith. Current interest rates are around 5% and have been slowly ticking up over the past 3-4 months. Why should you care? Take a look at these examples:
Interest Rates Change from 5.0% to 6.0%
$250,000
- $156 extra per month
- $18,720 extra over 10 years
$500,000
- $314 extra per month
- $37,680 extra over 10 years
$750,000
- $470 extra per month
- $56,400 extra over 10 years
A 1% difference in your interest rate could seriously impact your bottom line. If you’re one of those buyers, still waiting to make your move, I hope it’s for a good reason, or that “peace of mind” could be an expensive premium to pay.
About The Author: Greg Eckler is an established Denver realtor with Affinity Group. If you have any questions about Denver CO real estate, or the surrounding area, he’ll be happy to assist you. Search current Denver listings at DenverRealtyExperts.com
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