I can tell you from personal experience through my Charlottesville real estate practice, that the very best Albemarle County properties are selling right now for the least amount of money. That’s what happens at the bottom of a market downturn, and those savvy buyers that have the intestinal fortitude to tune out all the negative media coverage, will be smelling like roses a few years from now. Sure, buying a year from now will still net you some great deals on Charlottesville homes, Albemarle estates, and Wintergreen resort real estate, but not the best deals. Why? Because what you will be buying a year from now won’t be the best properties. Those will have already been sold. And, to make matters worse, you’ll be paying the same money or more money for an inferior property. Not bad enough? Interest rates have nowhere to go but up, and they will be higher by the end of this year driven by either the fear of inflation, increases in Federal Reserve money rates, or both. Even a modest increase in interest rates will result in a dramatic increase in the total cost of ownership.
You Do the Math
Here’s a quick example using the mortgage calculator on my ChaseTeamOnline website: Let’s say you buy a $400,000 home, put 20%, and borrow $320,000. Total principal and interest for a 30 year fixed mortgage at 6.0% is $1918.56 per month. That same property will cost you $104.05 more per month at a rate of 6.5%. Total increase in cost over the life of the loan: $37,458.
Mortgage Rate Watching
If you have been monitoring the mortgage rates recently, interest rates have been moving slightly higher. Where will they go? No one knows. The question is this, do you wait and hope rates fall again or act now?
I look forward to your comments.
Until my next post,