Depending on where you live, you may be feeling frustration over the housing market. In Seattle, where I live, our home prices have just become the #2 fastest rising in the country, #1 is Portland, OR (http://www.seattletimes.com/business/real-estate/portland-and-seattle-home-prices-rise-at-twice-the-national-rate/).
This information can make buyers want to stop looking until the prices come down. But guess what? Economists are saying that the market could continue in this fashion until 2019. “No problem, we’ll rent,” say many, but with so many buyers, not enough inventory, and more hiring for the big companies nearby, rents are sky high.
You can see how the prices have increased since 1989 with the blue bars. The light-blue line shows average monthly payments. Even when prices were much lower in 1989, interest rates were 10.3 freaking %, so the monthly payment was quite high. Now look at the rust-colored line which is the appreciation trend line. This shows if the market never fluctuated over the last 17 years and kept a steady increase of approximately 2% in monthly payments (which would have been less stressful than the recession we had!), you would be paying pretty darn close to what today’s monthly payment average is even though the house prices are high. Why? Because the interest rates are so low!
Economists keep saying it’s only a matter of time for interest rates to rise again, so will you risk not buying now because the list price scares you? Apparently the prices are going to continue this trajectory for a couple of years, but will the interest rates keep going lower? I wish I knew.
I suggest if you are ready to buy now, you do what you can to make that happen. First off, find a Realtor who has all of the tools and information to help you make informed decisions when making an offer in this competitive market.
What do you call cheese that isn’t yours?
Now that you are in a good mood, go find a great Realtor and your perfect house!