Mortgage rates are at their LOWEST point in recorded HISTORY!! These illustrations will show just how much diff erence interest rate makes on your monthly payment AND interest saved over the life of the loan. The numbers will amaze you. BUY NOW WHILE MONEY IS ON SALE!!! Opportunities like this only come along once in a lifetime, or in this case only once in history. Don't miss out. These illustrations refl ect the national average for the current interest rate. I encourage you to shop around. One lender I use was quoting a 30 year fi xed rate FHA loan of 4.25% interest with no points this morning when I sat down to write this report.
As you can see, the same house purchased in 2007, would have cost you $202.10 more per month in payment and $72,757.22 more in interest over the life of the loan than buying that same house today. There has never been a time when it made more sense to buy a home and lock in a great interest rate like this for 30 years.
Based on this table you can see that for the SAME payment in 2007, you could only have purchased a home with a loan amount of $134,815.28 vs. a $171,003.48 if purchased today! That's a whopping $36,188.20 diff erence! You can buy $36,188.20 MORE HOUSE for the SAME PAYMENT today than you could have bought in August of 2007. Assuming today's interest rates of 4.42%, every $10,000 increase in price is approximately a $50.19 diff erence in payment. WOW! For every $200 diff erence in payment approximately. That refl ects a $40,000 diff erence in purchase price. Can you hear opportunity knocking, or should I say BANGING on your door?
*Enough history, let's look ahead. The Mortgage Bankers Association forecasts predict that the 30 year fi xed RATE to reach 6.3% by the end of 2011! Ouch. Don't wait. The cost of waiting could be VERY painful. Based on today's rates and the Mortgage Bankers Associations own forecasts, that $150,000 loan amount we talked about above, will cost you $175.54 more a month and $63,196.09 more interest over the life of your loan if you just wait until the end of 2011 to buy. To make matters worse, if you wait to buy you'll get $32,331.79 LESS HOUSE FOR THE MONEY. Things to ponder...
HOW ARE HOMES SELLING?
Not particularly well. The tax credit induced, late summer slump is upon us and it isn't pretty. The Kansas Association of Realtors figures showed a 35.7% drop in home sales for July 2010 over July 2009. Home sales in the Wichita market dropped 35.8% in July over June sales! Talk about fallout! Most real estate industry experts were expecting a late summer slow down after the tax credit deadlines came to a close. By moving sales forward that may have otherwise occurred anyway, but later in the year, we now feel the predicted "slump." The numbers aren't firm as of the time of the writing, but the August sales figures appear dismal at best.
Where, oh where, have the buy-ers gone? That's what most agents have been singing this past month or two. While there is light at the end of this tunnel, one has to ask themselves, what is everyone waiting for? Another stimulus, tax credit or something? Buyer activity such as calls on properties, number of showings, internet traffic, and the like all have shown a marked increase in July and August. These buyers are definitely out looking, but seem to lack the incentive or motivation to make offers and sign their names. Without many exceptions almost every price range is now in a full-fledged BUYER'S MARKET. All indications show an increased buyer interest but the sales have yet to follow..... stay tuned....
ARE THERE A LOT OF HOMES FOR SALE RIGHT NOW?
Yes. In July 2010, there was a 19% increase in inventory of existing homes compared to the same month last year. At the time of this writing the August data indicates a widening of this gap. While there are quite a few more people listing their homes as opposed to last year, that isn't the whole story. Without a corresponding increase in sales to support the increase in inventory, the market tilts to favor the buyer. Because the July and August sales were very slow, and the new listings have continued to come on the market, this will only become more difficult for the sellers. What's the message to buyers? You have a lot to pick from, so you know you're going to get a good house for a fair price. Seller, price the home properly and make necessary improvements and you're home has a good opportunity to sell. Your home has to compete for the buyer's "business" in order to receive an offer. The Wichita area currently has a 8.3 month supply of existing homes for sale in July, STRONGLY favoring the buyer. This is an increase from only 5.4 month supply in June.
Every price range is itself a different market. The homes in higher price ranges aren't experiencing near the buyer activity as the lower priced homes. The market for homes under $160,000 is still moving along nicely. Home sales above $180,000, and certainly above $200,000, showed the biggest slow down and definitely favors the buyer. Refer to the table above to see how the price range of your home may be aff ected by current market conditions.
Some price ranges are experiencing strong buyers’ markets while others are definitely more favorable to sellers. The price ranges between $100,000 and $160,000 make up 34.8% of the entire market, while only 9.2% of the market is buying homes over $250,000. The past year has seen a slow-down in "move-up" buyers and a marked increase in people wanting to "downsize" into something smaller. This more conservative mood is what has created the shift to the middle of the market, increasing demand for nice but more aff ordable homes and leaving some upper end homes to feel a lonely breeze. In a buyer’s market, only the nicest, homes that create the greatest value to the buyer, will sell. If you are priced properly, you won’t need to deeply discount the price of your home. Existing homes sold in June received 97.15% of their asking price. This means that on the average, across all areas and price ranges, sellers were only dropping their asking prices in June by 2.85% during negotiation. Is now a good time to buy or sell? I hope this monthly market report has been helpful in answering that question for you. My job is to provide you the information necessary so that YOU can make an informed decision for you and your family. Low interest rates and reasonable home prices make it a very favorable time to buy. If you’re considering the sale of your home, we highly encourage an aggressive marketing approach, proper strategic pricing, and making all necessary improvements to your home’s presentation and make it rise above the competition. Homes ARE still selling. The combination of these three things will result in a successful sale. This is not the time however, to ‘test’ the market at infl ated prices.
For real estate advice on your particular home, and homes sales data for your neighborhood, seek out the services of an experienced real estate professional. Mike Grbic, Mike Grbic Team Realtors, Associate Broker, Select Homes, a Realtor since 1994, has helped buyers and sellers in the Wichita area with thousands of successful home sales. Mike Grbic Team Realtors was ranked #1 Agent/Team in Wichita by number of transactions 2005-2009. They are also ranked #32 in the US Wall Street Journal. Mike can be reached for questions at (316)684-0000 or mike@mikegric.com
MIKE GRBIC TEAM
Select Homes 1445 N Rock Rd, Suite 125 / Wichita, KS 67206.
