Have Real Estate Prices Ever Looked This Attractive?
They rarely have. The home affordability index is at its highest levels and especially in South Florida we have seen property values drop 40-50%. I know the article below mentions that data suggests that we hit a bottom but I would agree 100% with that. Say I am right and we lose 5-10% more in value until we hit bottom. If you have a loan amount today at a rate of 5.25% or if you waiting for the actual bottom in 6 to 12 months where prices were 10% lower but your rate is now 6.25%, the payment is lower on the higher loan amount and lower interest rate. If you couple that with the $8,000 first-time homebuyers tax credit, isn’t it a no brainer?
“In addition to bargain prices, buyers also should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3% from June, according to the National Association of Realtors. And mortgage rates this week were at a two-month low of close to 5%, according to Zillow. Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. And with stricter standards, lenders aren’t going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.”