Real Estate Blog

DEC 13

2012

By  Brendon Payne
Posted in  Real Estate

Is the Current Market the Right Time to Buy or Sell?

The country’s economy may have its problems, but real estate isn’t necessarily one of them. Consider some recent figures from the National Association of Realtors that show anything but a stagnant market.

• The median price of existing homes is 14.7 percent higher ($219,000) than it was a year ago.
• Home sales for the past year increased in 44 states.
• The almost 70 percent of families owning homes represents a larger percentage than ever.

In short, more people than ever are buying and selling homes. Even states with slow sales over the past 5 years have shown strong growth. And nationwide, the median home price has grown by 55 percent over just the past five years!

Another key consideration, especially for buyers, is financing, with more options available now than ever to help make home ownership affordable, including adjustable rate mortgages and interest-only loans.

• Interest only loans are just that, with homebuyers paying only the interest on a mortgage at first but not the principal. While it’s one way of lowering costs during the early years of a mortgage, it can also work against buyers who may find themselves with no gain at all if a market cools quickly.

• In Adjustable Rate Mortgages (ARMs), low interest rates are offered for the first 3 to 10 years. If interest rates continue to go up during that time, you may find yourself facing significantly higher payments after the initial period is over.

While interest only loans and ARMs are sometimes attractive or even necessary ways to buy property, if you’re planning to remain in your home more than five years, you’re typically better off with a fixed-rate mortgage. But sometimes that’s just not possible. In California’s boom market, for instance, only 18 percent of residents are able to use a traditional 30-year fixed rate mortgage. And an astounding 61 percent of buyers have had to avail themselves of interest-only loans.

So again, you’re generally better off with a fixed-rate mortgage. That way you’ll build equity by paying down the principal. And there’s rarely been a better time than now to lock into a good rate and start building equity from owning a home. The real estate professionals at Century 21 The Harrelson Group are ready to help you start building your equity today in one of many great Myrtle Beach homes for sale.