If you have been reading my blogs, following me on instagram or on facebook, then you have heard me say time and time again that this is a HOT seller’s market. Depending on the price range of the house, a listing may come on and off the market in a matter of a few days. Even the winter months have not slowed this down. And many houses are being sold for well above the list price.
So why is it important that a buyer know the difference between the “cost” verses “price” of the home? Expectations. It’s that simple. In this market, the priority is no longer getting the best deal… the priority is getting the house!
Let’s take a look at where housing prices are going in the Triangle Area and how this affects the buyer:
- House prices are definitely going up. If Wake County prices are increasing at a rate of 6.5% annually, then a $400,000 home is appreciating about $26,000 per year or $2,167 per month. Buyers waiting until later in the season to buy may be in sticker shock….
- Interest rates are also slowly going up. For every 1% increase in interest rates, a buyer will lose 10% of purchasing power. For example, let’s say a buyer qualifies for a 4% rate on a $400,000 loan amount. When that interest rate increases to 5%, it will cost the buyer an additional $238.00 per month… which means the buyer can only qualify for a loan of $360,000. It’s very important that buyers be educated on how increasing rates will affect both their monthly mortgage costs and the purchase price they should be looking at with their realtor.
- But, it’s not all bad. Sometimes people are so afraid to offer a couple of thousand above list price. Why? For every $1,000 they borrow it will only add approximately $5 to their monthly payment. That’s not that bad when you think about it. In this case, adding $5-$25 to your monthly mortgage cost will allow you to purchase a home at the price the seller will accept. Only you can decide if that added cost is worth it to secure your dream house!
Bottom line is this: don’t just fall in love with a $400,000 home until you have met with your lender and realtor to understand what it will really cost you. (Not to mention if you even qualify for it!) Have a good team on your side that you trust and will guide you every step of the way!
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If you are interested in finding out how I can assist you with your real estate needs, click this Calendly Link to book time for us to chat.
Relocating to the Cary area? Click here for the Cary Relocation Guide.
Thinking of selling your home? Click here for the Seller’s Guide.
Learn More:
- Click here to learn more about the Due Diligence Fee.
- Click here to learn more about the Earnest Money Deposit.
- Click here to learn more about the benefits of having a buyer’s agent.
- Click here to learn more about the benefits of having a seller’s agent.
Happy Home Buying & Selling In North Carolina!
