On the fence about Buying or Leasing another Year?
Here's the situation: Your lease expires this summer, you've been looking at homes online, and nothing is really perfect. Your choice, try and find something now, and maybe settle a bit for less than perfect, or save some more money and buy next year this time. Maybe the Sellers market will not be so bad... Sounds logical, but let's break that down and look at each part in detail.
Interest Rates- the overwhelming consensus is interest rates are going up
How far and how fast is the question ... here is a breakdown from various experts. Some are above 5% at year end, still low by historical standards, but it makes homes less affordable as we'll see.
Buying a $300,00 Home
Now lets look at the impact of rising mortgage costs, and appreciation. I'll use two examples. A first home buyer is considering a home in the low 300's this spring. She has an estimated mortgage of $300,000, Charlotte's appreciation last year was 5.4%, the chart below adds 4%
So, a rise of $226 /month means you have to earn an additional $775/mo, $9300/per year to qualify and buy the same house.
Overall, you had to pay $12,000 more for the house plus, 12 months of rent, assuming $1800 x 12 = $21,600... That looks like $33,000.
By the way, Dilworth, Midwood, Sedgefield- these markets are going up ar 5-7% per year.
Buying a $700,000 Home
So a $529 per month increase, you will need to earn an additional $1600/mo, $20,000 a year to qualify, to buy the same house.
If the area appreciates at the same 4%, then you'll pay $29,400 more for the house, and 2000 /mo in rent x 12 = 24,000, for a total $53,400. and an extra $529/mo as long as you have this loan. Ouch!
This is our reality, the time to get off the fence is now!
As for a let up in the Seller's Market, at least here in Charlotte, I see that continuing long into the future along the light rail line neighborhoods of Charlotte. We are at the beginning of an upward curve in home prices, and land is now about $1M an acre... so, a Seller market at ever higher prices will continue. It may be different in the suburbs, but I wouldn't bet on it.
I'll leave the conclusion up to you, but there is truly a HIGH cost of waiting just a year.
Author:Terry McDonald Phone: 704-390-6221 Dated: May 8th 2018 Views: 835 About Terry: My Relocation Story
I came to Charlotte, from Hoboken, NJ, just outside the NYC area with a wife ...
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The McDonald Group at EXP Realty is a group of professionals, dedicated to helping our Clients win in real estate. Expert and honest advice, local area knowledge, and seriousness of purpose but with folks who don't take themselves too seriously. The founder Terry McDonald, was a builder for 20 years, and has been a broker for the last 13 years. Buying a home or selling, first home buyer or relocating to Charlotte,the McDonald Group is here to serve. Our client list includes first home buyers to luxury homes, professional athletes, business owners and physicians. From in town to South Charlotte, Lake Norman too, we know Charlotte.
The Group's core values are all about integrity and market expertise. We look out for their clients interest above all others. We are a learning organization, and big believers in train ing and lifetime learning. Sellers know us for our technological savvy, our aggressive marketing, and the ability to consistently beat the averages in Days on Market. Buyers love us, we never pressure anyone, yet were able to save our Buyer clients 44% off the market average in 2013- and now that the market has changed we win more than our fair share of multiple offer situations.
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"Terry is the best buyers agent ANYONE could ever come across!!! He was very knowledgable about the area and what I, the customer, wanted for myself and my family. He showed my wife plenty of homes in the charlotte area that we were looking at and of course the one terry recommended we take a look at...WE BOUGHT!!!! We were able to get a BRAND NEW home for a GREAT price!!!! He is there when you need him....just a phone call or an email away. If you're moving to Charlotte ...TERRY IS YOUR GUY!!!! Oh did I mention that I closed on time in 30 days..."