Alright, so spring isn’t quite here yet, but it’s around the corner. That means that home buying starts to ratchet up. The weather warms, it doesn’t hurt to roll down your window at the Starbucks window, the sun is out more than nine and a half hours each day and you just want to fork over $150,000 or more on a new pile of bricks. Of course you do but you may be wondering if right now is the perfect time. What if next week the weather is a degree warmer? What if interest rates are a fraction lower in a month? What if home prices go down? What if, what if?
Let’s start by talking about the market a little. Right now the median closing price of a single family home in Washoe county stands at $232K. That’s the median close price, not the listing price. The median listing price stands almost $100K above that at $330K. These closing prices represent an average $30K increase year over year from January, 2013. Does that mean prices are too high? Maybe, maybe not.
Here’s the good news if you’re a looking to buy; there were only 379 homes sold in January, 2014. These numbers are close to the market numbers of January, 2010. This represents a good opportunity for homebuyers. Lower numbers of homes sold coupled with a relatively high number of homes listed (781) may mean a favorable market for buyers. But, remember that the string of cold weather could have played a part in this and been some of the reason buyers are holding out.
Should you start looking now? If you can stand the cold, yes. Interest rates on a 30–year fixed mortgage still stand at 4.48%. Historically, that’s still very low. That’s lower than they were in the beginning of 2011. I make this point because I cringe when people get too hung up on rates and stay glued to the internet waiting to see if the rates will tick up or down a couple base points. Don’t do that. We’ve be spoiled over the last several years with interest rates. They’re still low enough. If you want to buy a home, then pay off some credit card debt, keep putting into the savings account and forget about the new 75” LED TV (for now).
While demand is lower, it doesn’t mean that prices will drop. It does mean that you should get out there and take advantage of sellers who may be getting desperate and buyer “competitors” (of yours) staying in and not making offers. Thanks for reading and please take the time so sign up to receive updates or comment below. Cheers.