Facebook
Twitter
Pinterest
Copy Link
For many people, buying a home is probably one of the biggest investments they make. If you are using a huge sum of your lifetime savings to buy a home, don’t you want a well-educated real estate professional to find you a house in the shortest time possible and at the best price? In some neighborhoods today, SOLD prices are sometimes higher than the listing price for entry-level homes (price under $500,000). First-time buyers usually make up about a-third of the buyers. Investor buyers make up another 25% of the market. Some homeowners who want to trade up are still hesitant to make the move when home prices are dropping. Actually, falling prices provide a rare opportunity to move up. How so? The following example illustrates my point: Suppose your old home is valued at $200,000 and prices have fallen 20%
- If you now sell your home for $160,000
- You have lost $40,000
But suppose that the house you like to buy is worth $400,000. That house also drops 20%.
- You can now buy it at $320,000
- That means you will actually save $80,000!
In reality, high-price homes drop by a larger amount than low-price homes. Because there are more buyers for low-priced homes than sellers, the prices of low-prices homes do not drop as much as high-priced homes. In some good quiet neighborhoods in San Diego, the entry-level condos and homes are now selling way above the listed price -a sign that prices are still trending upward. If you have been thinking of buying, don’t wait too long. Interest rates can impact affordability. Although currently we are seeing higher interest rates, these rates are still considered historically low. It is all a matter of perspective. One should not treat the home solely as an investment or “cash cow.” Buy only what you need for shelter.
