With the inordinate amount of “doom and gloom” posts I submit on this blog I sometimes get accused of being somewhat pessimistic. Although I do not consider myself to be a pessimist (I believe there are opportunities in all markets), in an attempt to provide some balance, I thought I’d link to an article in this week’s Time magazine, which makes the case that now is the time to buy. The story can be found here.
Directed to those buyers who are waiting on the fence attempting to time the bottom of the housing market, the article makes the case that if one were to wait another 12 months to see, perhaps, another 10% decline in the prices, but also during that twelve months interest rates increased just half a point (say, from 5.5% to 6%), then the net cost differential would be a wash. In other words you would have saved nothing. …and lived for 12 months someplace you’d rather not be. See the Time article for more details.
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This article assumes a typical home price of 218,900. Reno MSA is not there yet.
Key west isn’t either.. do you expect that to be near 218,900? All markets are different. While reno may not be the MOST desirable place to live for some, It IS for many.. and deserving of an above average median home price.
And long term mortgage interest rates AREN’T going up in the short run. To the contrary, many believe there may be as much as a 1/2% or greater drop compared today’s rates. So I would make the case that if you listened to this article and purchased now versus 6 months from now [especially in Reno], not only are you:
1. Likely to pay more; but,
2. Your mortgage payment [because of the higher interest rate] will be higher than it would otherwise be later in the year.
Just my opinion but…
Time to buy? No, but we’re halfway there.