Thinking of a Vacation or Retirement Home? Buy It Now
When the economy was exploding in the early 2000s, many of us began to dream about purchasing that vacation home on the lake or securing a home in a more appropriate location for our retirement years. However, with the booming economy came skyrocketing house prices. Many of the homes we fell in love with quickly became out of reach financially. Perhaps we should take a second look at these same homes today.
With prices dropping by over 30% in some markets and with interest rates at historic lows, this may be the perfect time to do what we and our families have always dreamt of doing – buying that second home. Let’s look at the numbers.
Back in 2006 we may have seen the ‘perfect’ home but the $500,000 price tag was just out of reach. Today, we could probably get that home for $400,000 (if not less). We also would be financing it at the current mortgage rate instead of the rates available six years ago. The table below shows the difference in impact on our family’s finances:
Not every family is in the financial position to take advantage of the tremendous opportunities the current real estate market offers. But, if yours is, this may be the time for dreams to come true.
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It is really the time to buy a home. The market is growing again
and the prices will increase within a few years. So it is time for those who
like to own their own vacation home.
The national median income continues to drop, so why would you think that the market is growing or that prices will soon increase?
Not every family’s income has dropped. In the post itself, we say not everyone can take advantage of the opportunities available:
“Not every family is in the financial position to take advantage of the tremendous opportunities the current real estate market offers. But, if yours is, this may be the time for dreams to come true.”
As far as prices are concerned, they have already been rising over the last several months. Fiserv just projected that prices will increase at an annual rate of 3.7% over the next few years.
…”the next few years”? How about now? A key measure of the economy, durable goods orders, dropped 13.2% in August. Dreams are wonderful, tho…
You also say, “buy it now”, but a key measure of the economy, durable goods orders, dropped 13.2% in August.
@fa392b717eea3821983d241b9219d896:disqus – All of your points are correct. However, if you are going to buy anything, you want to purchase the item at the lowest possible cost. The cost of a home is determined by price and mortgage rate.
Regarding price, EVERY study issued this year (The Home Expectation Survey, The Urban Land Institute Study, The Demand Study and The Fiserv/Case Shiller Projection Study) call for prices to increase starting in 2013.
Regarding mortgage interest rates, just yesterday they hit the historic low of 3.4%. Most experts do not believe they can fall much further.
Based on what the experts are predicting, time will only increase the cost of buying a home.
If a family has solid employment, and many still do, and have the desire to own a vacation home, we strongly believe now is the time to buy.
The US GDP dropped to a 4 year low, in August. Clearly, this is an indicator of a pending recession.