In this market, it is hard to know who to trust or listen to. You hear one channel full of talking heads telling you the sky is falling. The next channel says that the economy is starting to pick up. Everywhere you turn you find people buying new houses as prices that we haven’t seen since the 1980s and other people saying they are waiting because the market is still tanking. Here is my opinions on the three top questions that I hear on regular basis:
If prices continue to fall, why would I want to buy a house now? Answer: Price is not the only thing, as a buyer, you need to be looking at. You need to take into account the total cost of your purchase. While house prices are at historical lows, so are interest rates. If you wait for the bottom of the market or what you perceive to be the bottom of the market, you may miss it and buy as interest rates are rising. Maybe you saved an extra 2% on that house, but your interest rate is 1-2% higher than you could have gotten now. That interest rate difference may significantly outpace the extra savings in price in just a couple short years.
When will I begin to see house price appreciation? Answer: In Saint Paul real estate, there are some areas that have been hit harder than others. Answering that question depends slightly on the makeup of your neighborhood and if the prices were over-inflated over the last couple years. Most experts do agree, though that we should start seeing a very tiny increase (0.5%) starting in 2011 and increasing each year. They expect we will see up to a 10% appreciation between now and 2015.
Renting is so each and relatively cheap compared to owning a home, why should I buy now? Answer: Stop the car! If you are asking yourself that, why are you even in the housing market! Frankly, buying a home really should have little to do with financial reasons. Don’t allow money to be your only consideration. You want a place to raise your children, a place for your family to feels safe and call home, a place that has enough space for your family and leisure, and somewhere you control. These are the reasons you buy a house instead of renting.
While I am just another voice among the group, the answers to the above questions should help you make your decision to find that home and buy it now.
I am a licensed Realtor in the State of Minnesota. This website is not a multiple listing service, but each Minnesota & Minneapolis real estate agent is a member of the Regional MLS of MN, inc., a provider of the Minnesota MLS.