I Plan To Wait To Sell and Then Buy - This Could Be Our Biggest Mistake?!?
Seller's Market - Why The Phrase "I'm Just Going to Sit Tight and Not Sell!" Could Be Very Costly
Everyone can agree The real estate market is one of the hottest on record. The combination of a Record shortage of homes and a Record number of buyers in the market for a home has climaxed into an explosion in home prices. Why in the world would anyone want to buy a home in this market correct?
Well, you might want to pause for just a minute and evaluate a couple variables before hitching your decision on that wagon. Could be that decision could be very costly. Let me explain.
1. Home prices - in the past 12 months home prices have increased an average 14.1%. What??? A more normal appreciation is 4-6% appreciation. And most economist are projecting the recent spike to calm down...so for the sake of running fair numbers we will present a more 'average' appreciation.
Let's use 5% appreciation to help explain what is could like moving forward. A home valued at $300,000 would cost $315,000 12 months later. Two years later that value would be approx. $330,750. That's a cost of $15,000 for one year wait and $30,750 for a two year wait. (NOTE-Most economist are projecting the appreciation to be higher than 5%)
2. Interest Rates - This is the BIGGEST FACTOR to consider in all variables studied. Any seller/buyer should study this above all other variables. It's the most costly and the most value add possible to your wallet. So, let's run the numbers. 3% interest rate on $300,000 home (for this example we will assume $300,000 is the loan amount...