Sound Real estate information for the mid-peninsula of San Francisco: the Silicon Valley.
Thursday, May 19, 2011
The real price of buying..
The real price of buying is the cost of buying.
Will prices continue to fall? Should I buy now?
While price is always one of the major concerns when buying a property, cost and affordability should be at the forefront of your considerations as a buyer.
That means you have to take into account what your monthly payment will be, considering not only the price of the home but also the interest rate of your mortgage. Waiting for prices to bottom out while rates are increasing can wind up costing a lot more.
So the price of the property is, in a way, not the thing to focus on: if interest rates are low enough, the home that will make you happy could be a lot lower in price than you'd think. - I know, I know, no one wants to over pay for a property; but this is an other matter - and so "relative".
We cannot control what the market will be doing, but we can control how we address our housing expenses.
So I say, look at what is comfortable to own, without breaking the bank, and see if something fits the bill.
On the subject of interest rates: all lending and financing institutions, like Fannie Mae (FNMA – the Federal National Mortgage Association), Freddie Mac (Federal Home Loan Mortgage Corporation), the National Assocation of Realtors, PMI (Private Mortgage Insurance) and the Mortgage Bankers Association are all projecting rising interest rates over the next several quarters.
Although I have to say, personally, that I did not expect rates to stay so low so long. So who knows. If you have an opinion, chime in!