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Q: Shouldn’t I wait until home prices go even lower to buy?
A: Just as no one can accurately predict the peaks and valleys of the stock market (name one person who sold their tech portfolio in April of 2000), the same holds true for housing. If you wait for what you think is the absolute bottom of the housing market, you could end up waiting for years. All the market fundamentals show that now is a good time to buy – prices are down, interest rates near historically low levels, and there are lots of homes to choose from. If you buy now, you can reap the gains of price appreciation. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.
| Renters: Home prices have fallen and rents in Northern California continue to climb so for a renter, it’s a perfect time to buy. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of a fixed-rate mortgage. Once you become a home owner, you are able to take advantage of the tax deductions that homeownership offers, and you begin to build equity in your property. The sooner you make the jump from renter to home owner, the quicker you begin to create and build up your wealth. |
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Q: Shouldn’t I wait until interest rates go even lower before I buy a home?
A: Interest rates for 30-year, fixed-rate mortgages are currently around 6 percent which is extremely favorable for buyers. In fact, the interest rates are hovering near 30-year lows. But waiting to time the market is a dangerous game. Even those who follow the market for a living can’t figure out when interest rates will bottom out.
Home prices don’t necessarily move in unison with interest rates. So, if you decided to wait to purchase a home and the price dropped from where it is today, you could still end up losing money. How? If interest rates were to move up while you waited, the savings on the reduced home price could be more than offset by the higher monthly payment you would be making over the life of the loan.
Q: Doesn’t it make sense to wait out the market until I can get the same price on my home that my neighbor got when he sold a year ago?
A: It’s always better to trade up in a buyer’s market. While the value of your house has fallen, the prices of higher-end homes have also dropped. Here’s an example:
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Your neighbor sold for $500,000. Let’s say values in your area have dropped 10 percent, so you could get only $450,000 for your home today. You have your eye on a move-up home that is priced at $700,000. If you sold your home today for $450,000 and purchased the larger house for $700,000, the difference in price would be $250,000.
But if you waited to recoup the 10 percent value on your home and sold it at $500,000, chances are the move-up home would also increase in price 10 percent to $770,000. That’s a $270,000 price difference. So by selling today, you would actually save $20,000. |
Q: Why buy a new Delco Builders home instead of a resale home?
- Create your dream home: pick your interior finishes in our new home design center.
- Lower monthly utility bills: our highly energy efficient homes are Energy Star® rated.
- Enjoy piece of mind: our homes are designed and built to better withstand seismic events such as earthquakes and wear and tear caused by Mother Nature.
- Eliminate home ownership headaches: Delco new homes are backed by comprehensive warranties and each Delco new home is supported by our service department that is committed to customer service and satisfaction.
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