Last week the Case-Shiller index reported that home prices continued their recovery, rising 8.1% in January, from a year earlier. That number is expected to rise even further once February and March sales are reported. This should cause serious concern for buyers. Consider the following example:
A buyer is planning on purchasing a home valued at $500,000. The same buyer debated purchasing last January, when the price was $460,000. Waiting the additional 12 months cost the buyer $40,000. Viewed another way, by waiting to purchase, this unfortunate buyer has effectively written a check for almost $3,400 every month for the past year.
This year, prices in growth markets could easily increase another 10%. The house that is now worth $500,000, could cost $50,000 or more by next April. In other words, for every month a buyer waits, he could be paying over $4,000 more for the same house!
In the above example, there’s nothing that can be done by the buyer to make up for the $40,000 loss he experienced, but there’s still time to avoid losing another $50,000 by buying now.
Waiting another year is likely to increase the lost opportunity for a great price by $90,000. The solution: BUY NOW!