- BUYERS ARE IN CONTROL.
With Low interest rates, a high supply of homes –old and new- and a strong statewide economy, families can take advantage of the “Buyer’s market” Morgan County is experiencing right now.
Homebuilders with completed, available homes are offering incentives unheard of a year ago when the market was hot. Homebuilders are willing to negotiate more than in years past to sell an existing home. Most homebuilders can’t carry an abundant of inventory of homes without suffering the economic consequences. The buyer who understands there is room to negotiate is in control of the home – buying process.
- HOME PRICES ARE RELATIVE.
Even if you already own a home and worry you’ll get less for your home than you would have 12 months ago, don’t forget that you will save at least that much on your next home. Your existing home value may have decreased, buy in today’s buyer’s market, higher-end homes are also dropping in price.
For example, let’s say you are interested in purchasing a $500,000 move-up home that has dropped 10 percent in value and now sells at $450,000. Let’s say you can sell your existing home for $270,000 (even though it’s worth $300,000). Your “move up” to the $450,000 home will cost you $180,000. On the other hand, if you wait until your home rises back to $300,000, your move-up home will now be priced at $500,000 or more. That’s at least a $200,000 price difference between the two homes.
So by selling and buying in today’s market, you would save $20,000 in this realistic example.
- UTAH’S ECONOMY IS STRONG.
The housing problems prevalent in other areas of the country are driven, in part, by a slowing economy. In contrast, Utah has one of the strongest economies in the country and employers are searching out of state for employees, according to Jason Eldridge, executive vice president of sales for New Reach, which provides research data to real estate professionals. Out-of-state employees often demand higher salaries, which allows them to afford more home.
In fact, a Forbes article appearing on the USA Today Web site (“Best cities for bargain housing: Salt Lake City, Raleigh”) From February 2008 names the Salt Lake City area as one of the best places to search for a home. This is because there is “healthy job growth and more houses available than people to buy them. This is not due to foreclosures or economic downturn, but to overbuilding which should balance out in time.”
4. BUYING A HOME IS A SOLID INVESTMENT.
Most people list their home as their most significant investment. Thanks to “leveraging,” purchasing a home is by far the best long-term investment. Leveraging means putting down a small amount of money to earn a big return. For example, let’s say you use $10,000 to purchase a new $250,000 home, and the house appreciates 5 percent in the first year. That means, after one year, the house is worth $262,500 – a gain of $12,500. Your annual return on your $10,000 investment would be a whopping 125 percent.
By contrast, if you put that same $10,000 in stock and it posted a 5 percent gain, you would net only $500 return. As a homeowner, your savings will continue to grow in other ways. First, every year a greater portion of your monthly payment goes to the principal, reducing the amount of your overall loan. Second, your home appreciates over time, making it one of your best financial investments. Third, mortgage interest can be tax deductible, which means you pay Uncle Sam less and keep more of your own money.
DID YOU KNOW..?
· 70% of Americans said interest rates were likely to affect their decision of whether to buy a home.
· 97% of first-time homebuyers would never go back to renting.
· Homeowners under 40 with incomes from $20,000 to $50,000 have 10 times the median net wealth of renters.
· The Homeownership Rate in the United States is 69% - the highest in the world.
· Nearly seven out of 10 call their home their most valuable investment.
· Interest rates near a 30-YEAR LOW enable homebuyers to stretch their investment dollars.
· Utah was named the SECOND BEST PLACE IN THE NATION to do business, and it is known as the most dynamic economy in the nation.
Jerry Pierce
Real Estate Consultant
Executive Realtors
jerry@mymorganhome.com
801-829-5457