Cost vs. Price Explained
We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Let us explain.
Yesterday, we reported that the Mortgage Bankers Association (MBA) is projecting that mortgage interest rates will inch up over the next twelve months. On Monday, we explained that many experts are calling for home prices to also increase over the next year.
What Does This Mean to a Buyer?
Here is a simple demonstration of what impact certain changes would have on the mortgage payment of a home selling for approximately $200,000 today:
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This is a really good graph to show our buyers. Our market is showing a strong increase of home prices right now over this time last year. If the buyer was waiting for the bottom to buy a home they may have missed out
This is a fantastic point that I have always tried to make when working with buyers here in Silicon Valley. I will use this “impact of interest rates” at my next open house as a “handout” and also share it on my social media for those that prefer Facebook, Twitter and my Blog.
Thanks!!!