While only you can decide when it’s the right time to purchase a new home for your family, there are some compelling reasons to consider a move now rather than later…
Did you know that sellers moving up to a more expensive home actually fare better when prices are low? As you can see in the chart below, even move-up sellers who bought in the peak of the market will come out ahead. This is because the money you save on your more expensive home will outweigh the loss of value on your current home.
While waiting may increase the value of your current home, it will also increase the purchase price of your new home. According to the latest S&P/Case-Shiller Home Prices Indices–the leading measure of US home prices–prices are already up 7.4% year-over-year in the Seattle Metropolitan area. If you’re moving up to a more expensive home, this means you’ll actually have less net gain by waiting to sell and purchase your new home.
Rising interest rates will also have a direct impact on your bottom line. Our current 3.4% interest rate represents a phenomenal low. How low? Buyers now actually pay less monthly interest on a median-priced $856,000 house on Mercer Island today than they did on a median-priced $458,125 house back in 1998. Considering wage increases since then, that’s pretty incredible! However, rates have started slowly creeping up since December and are expected to rise to 4.4% by the end of the year. Even this small change can mean a huge difference in both your monthly mortgage payment and the loan amount you can can qualify for…
A shortage of homes for sale in the current market means less competition for sellers. Right now, there are less homes for sale in the Seattle-Eastside area than we’ve seen in the past 15 years (as long as we’ve been keeping record!). While that might make it harder to find the right home to purchase, it will also reduce the time it takes to sell your current home. Buyers are quickly snapping up homes as they become available, and we’re even seeing multiple offers on homes that are strategically priced and well-prepared for market. Selling your house faster will minimize the typical household disruptions–such as showings and open houses–that you would typically have to contend with during a slower market.
*1: Projected increase based on current 7.4% year-over-price gains for the Seattle area as shown in the S&P/Case-Shiller Home Price Indices.
*2: Projected average 30-year fixed mortgage interest rate in Q4 2013 based on the Mortgage Bankers Association predictions.
S&P Dow Jones Indices Press Release, January 29th, 2013
© Copyright 2013, Windermere Real Estate/Mercer Island.