Wes Black, Real Estate Pro in Louisville, KY


Asked by Wes Black, Louisville, KY Mon Jan 24, 2011

Help the community by answering this question:


1. Bears make money, Bulls make money, Pigs get slaughtered.
2. Interest rates are way below normal, a 1% spike in rates is 7 1/2 times greater than a 1% drop in the price of a home. A 3% bump in rates ( which would be back in the normal range prior to last 5 years) on a $100,000 loan is almost $24,000 in higher payments over a 10 year period. House payments are made with hard dollars (after tax). Yes, interest is still deductible, but that is misleading, you already receive a personal deduction without interest. And you still must write a check in after tax dollars for the increased house payment.

I have watched many waves in interest rates over the years and what goes down must go up. They rise just as fast if not faster than they fall. When they start to rise there has always been an increase of volume because the fence setters start jumping in, more buyers chasing the same number of properties makes prices go up, not down.
2 votes Thank Flag Link Mon Jan 24, 2011
First, you can't time the market. Real estate is not one big monolithic market. The media reports at a national level but within the same metropolitan area, some communities have and will recover faster than others. Secondly, constant change and new regulations have been the one certain thing in this market. As said by others, interest rates may change. Congress may decide that a 30% downpayment is better. Who knows? Finally, a home purchase is not a strictly financial transaction. It is not guaranteed that at the magical moment where you feel prices have hit bottom that the home you want for your family will be waiting for you. Now is a great time to buy. Prices are affordable. Interest rates are low. Sellers are mostly willing to negotiate. Why wait?

Millie C Lumpkin, SFR
Century 21 Pro-Team
Email: mlumpkin@c21proteam.com
Phone: (708) 213-6141
1 vote Thank Flag Link Tue Jan 25, 2011
I agree with Carl, but I have to wonder - who has a "buyer" who wants to wait six months? Do people really come to you and say, I want you to be my agent . . . in July?
1 vote Thank Flag Link Mon Jan 24, 2011
I would say, true. And anything can happen. But homes are not commodities are they? In other words, this one house may not be available in the summer. If you mean any house may fall in price, true, but it could sell any day too. If you mean wait until summer and see what is available then, OK. Prices may be higher. Rates may be higher, too. Bottom line, if you can wait to be a buyer, you probably don't need a house and therefore would not be a buyer in the summer either. Fact is, people do not buy until they need a house, they want a house and they can buy a house. Miss one element and they are just talking, killing time. They are not real buyers anyway.
I'd buy that car, I like it, but I don"t like to drive. Never heard that. I like that house, I need a house like that, but it is too high. Answer: what price should it be then? You know the rest.
1 vote Thank Flag Link Mon Jan 24, 2011
I would suggest that while that may be possible , so is the fact that the interest rates may increase thus negating any savings derived from the possible fall in prices.
1 vote Thank Flag Link Mon Jan 24, 2011
One potential answer...

You may be right, no one has that crystal ball. But you may be wrong.

Irregardless, we should look to see if that right home is on the market, and how great a deal we can get.
You never know how far a seller is willing to go until you try, and if we can get the right deal, we can take the next six months appreciation or depreciation out of the picture!

Good luck and Happy selling!
0 votes Thank Flag Link Thu Nov 10, 2011
My motto is simple...
"Deals come along every day...Some are FOUND and some are MADE.

My clients choose me in part because of my track record with both finding deals and making deals. If a buyer's Realtor can't recognize a great deal or negotiate for a great deal, then the market isn't your issue, they just need a Realtor they can trust to get the job done.

Another fence-pusher is getting across that if they wait for the price to be lowered, then they increase the odds for a bidding war that ultimately drives the price back up (or they lose the house). A buyer is better off making the offer they want to make BEFORE the price drop. Mentally, Sellers are already preparing to lower their price and are feeling desperate. That feeling immediately goes away when they lower the price on the market because of their new-found hope. This is first and foremost a mental game of chess. You just have to play the game!

Good Luck...People are still selling and buying...Everyday.

Mark Atteberry, SG Priest Realtors
Personal Service, Expert Results
0 votes Thank Flag Link Sat Feb 19, 2011
I would tell them that rates will be rising later in the year - and even if prices are lower......the higher rates will make the home less affordable.

Good Luck!

Gerry Dunn
Associate Broker
Serving Maryland, D.C. and Northern Virginia
0 votes Thank Flag Link Tue Jan 25, 2011
Everyone wants to buy low and sell high. At some point it comes down to the opportunity. Is this the last four bedroom home on this street? I always wanted to live on that cul-de-sac, and so on. If we take a $150,000.00 purchase on a 30 year fixed FHA mortgage, the principle and interest payment at let's say 5.0% (5.823% APR) would be $784.82. If that same home gets reduced by 5% to $142,500.00, and now the rate is 5.50% (6.365% APR), that principle and interest payment increases to $788.59. Rainy days sometimes never show up.
0 votes Thank Flag Link Mon Jan 24, 2011
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