Thinking about buying a home in the Salida area, but feel like you are getting conflicting advice? You’re not the only one. First sales are up, then they’re down. The market is showing signs of renewed movement, but then that movement proves only horizontal. Signs point to a recovery, then oil prices rise, creating uncertainty. Salida’s market has retained a great deal of stability compared to others, but what does this all mean for the prospective home buyer and how can it affect your purchase?
You ask: If it’s possible that prices could continue to fall, why should I buy now?
I say: WELL, the primary concern for folks selling a home is price, while your primary concern should be cost. This means you need to take into account your financing options and what your monthly payment will be – considering not just the price of the home, but also the interest rate on your mortgage. Waiting for prices to drop while mortgage rates rise could cost you more in the long run. Fannie Mae, Freddie Mac, the National Association of Realtors, PMI and the Mortgage Banks Association all project rising interest rates over the next several quarters. Meet with your mortgage professional to help you understand what an interest rate increase will cost you based on the size of your loan – that will help you make a decision.
You ask: If I buy now, when will I begin to see appreciation?
I say: APPRECIATION varies by market. To get a better idea we’ll need to look at continuing pricing trends, however, there are indicators that suggest values will begin to rise nationally this year. New and existing home sales are up. The National Association of Realtors projects a 0.5% increase in 2011. Additional research shows experts think prices will start to increase in the second half of 2011, and will reach a cumulative appreciation of more than 10% by 2015.
You ask: Is buying really better than renting?
I say: WHY did you even begin to consider buying a home? The Fannie Mae National Housing Survey shows that the primary reasons people buy a home have nothing to do with money at all: 1) They want a place to raise and educate their children (and Salida, Colorado is a great place to do just that!) 2) They want a place where their family will feel safe. 3) They want to have plenty of living space, 4) and to have control over that space. Basically, people want autonomy, What non-financial benefits will you and your family gain from owning a home? Your answers should be the reason you decide whether or not to purchase.