The Voice of Delaware Professional Real Estate Professionals

Home Values going up???

“A growing number of pundits feel that the Fed may mention some new stimulus in the form of a third round of Quantitative Easing (QE3). The news could initially bode well for Stocks and, in turn, could be negative for Bond prices and home loan rates. So this is an important news story to watch!”

-MMGWeekly-via John Thomas

Does this affect you as a buyer or as a seller??  YES!

Sellers first:

O.K., If Home Mortgage rates go up (the cost of borrowing money to buy a home) the monthly payments of a potential buyer will go up…aaand buyers buy based on that payment- soooo, if your $250,000 asking price is a monthly payment of $1164.89* (*3.8%-Principle and Interest only) and the rate goes up only 1%-to 4.8%….now THAT SAME PAYMENT buys $220,000, so your home is now “worth” $220,000…..YES, you LOST another $30,000!!!!!!……

Buyers, your turn:

K, here we go….Same scenario as above……Your money DOES NOT go as far as it used to:(….Now you’re looking in a low $200,000 neighborhood instead of a mid $200,000 one….BIG difference!!

But, Jeff, you just said the home values dropped!  Yes, cept, sellers are slow to accept that change.  Try “loosing” $30k overnight and see how quickly you get over it:)

What to do:

Depends on your individual situation and if you need to sell asap, if you do (need to sell asap) you may want to quickly find the market value (yes, reduce your price) asap and get er SOLD!!!

Buyers…..also depends….economic factors will not always be in your favor, when you find the home you LOVE, move on it quickly…..there are not many “nice” homes out there and the good ones go quick.

If you like risk and are in no hurry, it may pay to “see what happens”:)

It’s that easy:)


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