To Rent or Buy? Update for October 2012

Hello all!  It’s been a while since I have posted on the real estate market, but I feel, with elections less than a month away, it is necessary to do so.  I have several people who have asked me how well the market is doing.  As far as the Lancaster office is concerned, sales are up, volume (home price) is still down.  What does that mean?  Buyers are still getting great deals on houses.  And the inventory is astounding! Amy(mom) and I are entertaining inquiring buyers left and right.  Our listings are selling like hot cakes, and still I despair at the fact that we still get so many calls on rentals in Lancaster.  Most of which are from people who can actually be qualified to buy and are planning to stay in town for at least 2 years.  So what’s the deal?

WHY SETTLE FOR THIS…

Courtesy of apartments.com

WHEN YOU CAN HAVE THIS?

Courtesy of burkhartinsurance.com

A good bit of it comes from the fear that is still instilled from when the “housing bubble” popped about 4 years ago.  Houses were selling for exorbitant amounts of money, buyers who could not take on those huge monthly mortgage payments were getting qualified, and we were all promised the “return of investment” by the banks.  Of course, what goes up, must come down.  The real estate market fluctuates, and, right now we are officially at an all-time low in mortgage rates and house prices.  But it will not be like this forever.

Right now, we are seeing a little uptick in home prices.  This comes with the recovery process, and there is really no telling when house prices will see a drastic rise.  Buyers are regaining confidence in purchasing a home, which creating a demand for inventory.  Lucky for buyers, there is plenty of inventory to meet buyers’ personal needs.  It is just a matter of:

• Getting pr-eapproved with a good lender.  If you are not able to purchase now, allow the lender to set you up on a program that will help you build your credit.
• Having a little money put back.  With the market being a “buyer’s market” still, many sellers are willing to pay closing costs.  Home inspections will more than likely come out of your pocket at closing, though.
• Have a wish list for the home you want to live in.  This is not limited to number of bedrooms/bathrooms.  Look more into the lifestyle that the home will support.  Bedrooms and bathrooms are a compromise usually if you find the home of your dreams that is close to the lifestyle you want to live.  More on that later.

Once you have these three little duckies in a row, there is really no excuse for staying in that rental.  Rent prices are actually RISING while house prices are low.  Do you know what you could buy and own for that $800 your shelling out in rent each month?  Ask your lender.  Depending on mortgage rates, you would be pleasantly surprised.

Mortgage rates are the last thing I want to discuss.  I mentioned that the election is only a few more weeks away.  Statistics show that during times of national change, mortgage rates tend to feel the stress.  This could lead to a jump in mortgage rates before the year even ends.  Even if the interest rates were to jump a mere percent (1%), you could be facing thousands more dollars over the life of the loan in interest payments.  Now is the time to move.  If you have been on the fence about buying, I encourage you to at least get pre-approved with a lender so that you know what you can afford.  Then, start the house hunting.  Why give your hard earned money to someone else when you could own something that you could call the shots on?  Something to think about.

For kicks and giggles I ran a little search on apartments.com to show you guys the comparison of what we are dealing with when it comes to what you’re paying for rent on an apartment you don’t own versus what you could be paying monthly for a home you own.

Paces River is a popular apartment complex close to where I live in South Carolina.  I found a floorplan that is comparable to mine, with a few little tweaks.  However, the number of bedrooms and bathrooms are the same, and I believe my kitchen as well as my living room are larger.  Here is a floorplan of the Brittany apartment.

Courtesy of Paces River Apartments

The lowest that you will pay in rent currently(according to apartments.com) for this 2 BR/1 BA apartment is $695 a month.  I will also add the Paces River offers the typical apartment community amenities of a pool as well as a fitness center.

I bought my 2 BR/1 BA condo in 2009.  My mortgage payment this month was…ready for this? $234.74.  Granted my condo complex does not have a fitness center nor a pool, even with HOA dues of $90 a month, I am paying $324.74 a month to live in a house that I get to update however I want and will get to sell in the future, and hopefully get a return on my investment.  That is a monthly savings of just over $370 a month!  And $4,440 a year! You could put that money into something for you…like a new car, a vacation, or even put that money back for your next home purchase.

What would you buy with your newly-retained rent money if you could purchase a home?  What are your dreams for owning a home?  Why are you still renting?  I would love to hear both sides on this.  Please remember to be nice during debates such as this.

 

Live in the Upstate or Charlotte Region of SC?  Or even Charlotte, the NC Triad, or NC Triangle?  Start your home search here.