Home Prices Rise While Inventory Drops

By Nancy Minor

"I should have had a V8” will not be the words you hear in the near future. You will be hearing, I should have bought a home” in the next few months. 

Buyers who were waiting for the best deal to come along may have missed their chance.

As I watch inventory continue to drop and remain on the low side, I am seeing values slowly reacting. This is great news for most of us. If you bought a home in the last few years, you most likely paid a record low price. 

It is exciting to see homes are actually appreciating and as we have always known, real estate is an excellent investment. The home you paid $300,000 for in 2011, may actually be worth $315,000 in todays market, so congrats and welcome to the real world of real estate. 

A steady 4-5% appreciation every year would be reasonable to expect and an excellent investment. So if you are one of these purchasers you made a wise choice in purchasing when you did.

If you did not purchase during this period, then you have a great reason to hit yourself in the head and say "I should have …." The best reason is low interest rates. Increasing interest rates are becoming the number one reason to wish you had bought when rates were lower.

For the first time in ages we are seeing interest rates climb and they are climbing quickly. I have watched them go from almost, 3.25 % to now pushing 4.25% in the last two months. That does not sound too bad at first but the difference is about $50.00 on a $100,000 loan. This will make a difference in the buying power for purchasers and will be about $600.00 a year more that that home will cost the buyer.  

With interest rates going up and home values going up, you may think you missed the boat. You did not, you just missed the first wave. Interest rates are still excellent and home values are climbing, so if you buy now, or in the near future you will begin to enjoy the benefits of homeownership.

As a homeowner, you will be able to watch your home values increase and make your payments, knowing you have a great rate, not the lowest ever but if you buy while still under 6%, you are still buying at an extremely low rate and in 3 years if rates are 8 % you will not have to be among the "I wish I had" population with bruised foreheads.