Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.
The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.
PRICES
The National Association of Realtors (NAR) released their 4th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year:
The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.
A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.
INTEREST RATES
The Primary Mortgage Market Survey was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said:
“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”
So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?
The price is the same. It just costs more.
Let’s show you what the news means:
By sitting on the sidelines for the last 90 days a purchaser lost:
* $89.44 a month
* $1,073.28 a year
* $32,198.40 over the thirty year life of the mortgage
If you buy a $340,000 home, double all these numbers.
Bottom Line
Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.
by The KCM Crew on February 11, 2011 · Re-posted with permission
For those interested in GOOD NEWS about Real Estate - the facts with a Positive Spin!
Friday, February 11, 2011
Monday, February 7, 2011
I know who MY "best customers" are... do you?
DO you know who your best customers are?
How do you treat them?
Why are they your best customers?
Seth Godin's post today is pretty good... take a look:
Here's what most businesses do with their best customers: They take the money.
The biggest fan of that Broadway show, the one who comes a lot and sits up front? She's paying three times what the person just three rows back paid.
That loyal Verizon customer, the one who hasn't traded in his phone and has a contract for six years running? He's generating far more profit than the guy who switches every time a contract expires and a better offer comes along.
Or consider the loyal customer of a local business. The business chooses to offer new customers a coupon for half off—but makes him pay full price...
If you define "best customer" as the customer who pays you the most, then I guess it's not surprising that the reflex instinct is to charge them more. After all, they're happy to pay.
But what if you define "best customer" as the person who brings you new customers through frequent referrals, and who sticks with you through thick and thin? That customer, I think, is worth far more than what she might pay you in any one transaction. In fact, if you think of that customer as your best marketer instead, it might change everything.
How do you treat them?
Why are they your best customers?
Seth Godin's post today is pretty good... take a look:
Here's what most businesses do with their best customers: They take the money.
The biggest fan of that Broadway show, the one who comes a lot and sits up front? She's paying three times what the person just three rows back paid.
That loyal Verizon customer, the one who hasn't traded in his phone and has a contract for six years running? He's generating far more profit than the guy who switches every time a contract expires and a better offer comes along.
Or consider the loyal customer of a local business. The business chooses to offer new customers a coupon for half off—but makes him pay full price...
If you define "best customer" as the customer who pays you the most, then I guess it's not surprising that the reflex instinct is to charge them more. After all, they're happy to pay.
But what if you define "best customer" as the person who brings you new customers through frequent referrals, and who sticks with you through thick and thin? That customer, I think, is worth far more than what she might pay you in any one transaction. In fact, if you think of that customer as your best marketer instead, it might change everything.
Wednesday, February 2, 2011
GOOD NEWS ABOUNDS!
With prices flat and interest rates below 5%, there's NEVER been a better time to:
1. Buy your FIRST home. In MOST areas, it's MUCH cheaper than renting and with FHA only costing 3.5% down payment, it's not a lot more than "first and security"....
2. Moving UP to a bigger/better/nicer home. The numbers show you WIN BIG when you sell low and buy low in an upper price range. Let your Agent show you how that works... Don't wait for prices to go UP on your home... because percentage-wise, it costs you MORE on the home you buy! Sell/buy NOW to win the BIGGEST!
3. Invest. It's time to start investing in real estate again! I know a property nearby where I live in North Atlanta that with $30K down, you'll make a positive cash flow of about $6000/yr. Calculate THAT return!
Read the article:
http://www.inman.com/news/2011/01/27/real-estate-sales-rebound-in-2011-prices-nearly-flat
1. Buy your FIRST home. In MOST areas, it's MUCH cheaper than renting and with FHA only costing 3.5% down payment, it's not a lot more than "first and security"....
2. Moving UP to a bigger/better/nicer home. The numbers show you WIN BIG when you sell low and buy low in an upper price range. Let your Agent show you how that works... Don't wait for prices to go UP on your home... because percentage-wise, it costs you MORE on the home you buy! Sell/buy NOW to win the BIGGEST!
3. Invest. It's time to start investing in real estate again! I know a property nearby where I live in North Atlanta that with $30K down, you'll make a positive cash flow of about $6000/yr. Calculate THAT return!
Read the article:
http://www.inman.com/news/2011/01/27/real-estate-sales-rebound-in-2011-prices-nearly-flat
Subscribe to:
Posts (Atom)