A Terrible Time to Buy a Home?

CNN recently published an article titled, “It’s a terrible time to buy a house….”

In the opinion of LDSAgents.com, this is true because interest rates are much higher now than even a year ago, and home prices are still relatively high. The reason for the lingering high prices is that sellers still want to get the higher prices they have become accustomed to hearing about in the recent past. Thus, they are holding on to their properties until they simply must sell.

However, prices have been dropping dramatically in some areas. In the Intermountain West, homes in the $700K range have dropped, in some case around $100K. That’s a lot in a year and, in our opinion, there is more price dropping to come.

Recent reports have shown that homes in the Boise/Meridian, Idaho area were a year ago selling up to 173% of their true market value. In the St. George area, homes that were being built for $186/sq. ft. a couple of years have been selling for well over $400/sq. ft. more recently. But the feeding frenzy is now over and there is great potential for a “crash” in prices in these areas as the recession deepens.

The message here is: if you can wait to buy, do it! Things are moving in the buyer’s favor now and the odds are small that home values will go up in most parts of the country. In fact, the Producer Price Index published today has gone up again, thus, showing that inflation is still increasing. This, in turn, ensures that interest rates will continue to rise for some time and prices will continue to drop.

Having said all that, people still need a place to live and there are things that can be done to take the sting out of buying sooner rather than later. Cash buyers, as always, have more leverage in negotiating a better deal and don’t have to worry so much about interest rates.

Whether you are buying or selling, contact LDSAgents.com and we will connect you with an agent who will help you achieve your best price!

Buyers Market? Sellers Market?

It’s worthy to note that in January 2019 we’ve seen the largest sales decline in five straight years. While people are looking for homes and interested in making the investment, high mortgage rates and a lack of inventory are making it increasingly difficult for people to commit to a home purchase. Current home owners have been reluctant to sell because of the rates they would have to pay on a new home and those that own homes they could sell opt to rent instead.

Not only are we seeing the rise of mortgage rates but inflation is also a concern for many buyers in the market. While the mortgage and inflation rates have risen this hasn’t stopped the sales prices from rising as well. This incongruity begs the question “how much longer can it last?”

Sales of US homes fall year over year by most in 3 ½ years from the Chicago Daily Herald discusses more information on why now is not a buyers market.

Changing Your Mind About a Mortgage

Once you have put down earnest money on a house, are you locked in with no options? It actually depends on how your contract is written.

Many Generation Xers and Millennials are increasingly remorseful about their home purchases. A recent article in the Wall Street Journal points to a survey by Nerdwallet.com in January that revealed, “nearly half (49%) of homeowners who responded said they would do something differently if they had to go through the process again.” Read more