Seventy homes are in escrow here in South Lake Tahoe. It hasn’t been since September 2005 that we’ve seen that many homes pending. Over the last few years, a lot of people have been waiting for the right time to buy. It seems that many think that time is now. I’m really beginning to agree with them. Here are a few good reasons why it may be time to buy:
1. Interest Rates Will Go Up
Interest rates are low these days. They have no where to go but up and with inflation skyrocketing, the Federal Open Market Committee has a lot of incentive to raise rates. When this happens mortgage rates will increase, which means homebuyers’ dollars won’t go as far. Assume you can afford a $400,000 home with today’s rates. If interest rates increase by a single point, you’ll then be able to afford a $368,000 home. That single point will sap you of 8% of your buying power!
2. The Market Can’t Down Cycle Forever, Especially in Tahoe
The South Lake Tahoe housing market has seen a 25% correction since August 2005. Can prices really drop much further? I have no crystal ball, but we will eventually hit the bottom. With a limited supply of homes in the Lake Tahoe basin and an ever-increasing demand, we should hit bottom before many other areas.
3. It Is Better to Buy in a Buyer’s Market!
Those who are waiting for the market to hit rock bottom before buying are doing themselves a disservice. Buying a home isn’t only about getting the best deal possible. It’s about finding a home you can truly enjoy living in. With the number of homes on today’s market, you should be able to find what you want when it comes to location, condition, and quality. Finding that special home on tomorrow’s market could be much more difficult.
4. It’s a Home, Not a Stock
You’re buying something you will live in. Unlike a stock, bond, or commodity, your home will have utility. You’ll grow attached to it. And if you hold onto your home for a while, it’s pretty much guaranteed to increase in value.