Talking about real estate is always a hot topic. And everyone seems to have an opinion on where things will go. I too have an opinion but fact is...these are all just opinions. If anyone had the crystal ball, they would be rich. But let's talk about reality and "what-if". I promise, you will find this VERY interesting.
- If prices fell at the end of this year by just a bit, say a home that is worth $500,000 fell to $475,000, then what does that mean to you?
- If you own your home, then it means you just lost $25,000 worth of equity to buy that next home.
- It may mean that you will have to wait to move. If that is the case, are you okay staying where you are?
- I know what you are thinking though...if prices fell then my next home's price would be relevant, right? (We will take a look at that below)
- If you own an income property, then you just lost money.
- If you don't own, but want to buy you may think this is great for you, right? (We will take a look at that below)
Follow me here: If that $500,000 house fell to $475,000 you would go from $100k down payment to $95k. That's only $5,000. And chances are you just lost roughly $25k in equity.
And if prices fell but interest rates went up only 1%...well, let's take a look at what that means.
This first screen shot shows interest rates at 3.5% for a $500,000 home.
This second screen shot shows interest rates at 4.5% for a $475,000 home.
So, in my example of everything you've seen, if a $500,000 home fell to $475,000 and interest rates went up only 1% then you would be paying more per month for your mortgage and as for your down payment, you would only save $5,0000.
Let's talk more about real estate and the what-if's. If you are wanting to buy or sell a home, then my job is to help you accomplish that. And you need to be informed of all the possibilities that could affect you and your decisions. So call me and I'll be happy to go over this with you