We have been doing a lot of open houses on our Listings lately.  Part of the reason we like doing them is because it gives us a time to be able to meet buyers face to face and let them know in person the benefit of buying real estate, but also the benefit of buying in this market.  We take the homes that we sell very seriously and we give our all when trying to sell the listings we take for our sellers.   

Recently we were hosting an open house at a home that we currently have for sale on Dolan Ave in the city of Downey.  The very first buyer that came in made this comment after we asked them if they were interested in putting an offer on the house, “I’m just looking, I’m going to wait for prices to drop even more before I decide to buy.”  It is pretty much guaranteed that at least one person throughout the day will make a comment like that.  The following is how we respond to buyers with that mindset:

First off, there is no guarantee that prices will drop even further.  Prices have already dropped about 50% from their peak point and current MLS figures show that there is a leveling off of home values.  So as of right now, we are at a point where yes prices can go lower, but they also have the potential to begin an uptrend.         

Secondly, what is one of the most important things to a homeowner?  The payment!  In the end what matters, how much you paid for the property or what you will be forking out of your pocket per month to pay back the loan you’re about to take?  Let’s look at the numbers…Currently the rate for a 30 year fixed mortgage is about 4.5%.  Let’s say the buyer is going with the most common type of loan in this market right now, FHA 3.5% down payment and they are purchasing a property for $250,000.  With everything included, taxes, insurance, and MI, the total out the door payment comes out to approximately $1,620.90.  Now let’s say the buyer was correct in his hunch that home values were going to go down, and let’s just say that home values went down another 10%.  So the same house that was worth $250,000 is now worth $225,000.  Historically interest rates are lower than they have been in decades so we know that they are not going to stay at 4.5% for very long.  So let’s say rates went up to 6.0% and let’s say that you decide to buy now.  The payment with the same scenario as above except with a purchase price of $225,000 would be $1,664.98.  The payment actually went up about $40 if you bought the property at $225,000 rather than at $250,000 with a lower interest rate.

So all in all, we see with this example that it is actually better to buy a home NOW rather than wait, assuming prices will go down further.  Not to mention you will be missing out on all the tax benefits of owning a home while you’re waiting for prices to go down. 

The numbers speak for themselves.  If you’re thinking about buying, don’t wait any longer.  The figures don’t lie, it truly is a benefit to buy now rather than wait.  Give us a call!