b:include data='blog' name='all-head-content'/> 2 3 Eugene Mortgage and Real Estate News: Reasons To Buy In Today's Market

Welcome to the Eugene Oregon Mortgage and Real Estate News Blog

I hope you find the information and links in this blog usefull. The blog covers a wide range of real estate related topics. The focus is on items that effect the local market (Eugene / Springfield area), but we also cover items of National interest.

Friday, January 8, 2010

Reasons To Buy In Today's Market





I was having coffee yesterday morning and ended up chatting with a fellow next to me about the real estate and mortgage markets after he found out that I was a mortgage broker. The gist of the conversation was that his wife wanted to purchase a new home (4 bedroom because the kids are getting older and don't like sharing). He was telling me all of the reasons he has for not wanting to make a purchase.

His biggest objection was that he hated losing money on the sale of his current home. He figures he is going to take a hit of about 10% to his sales price if the current market trends hold true. It was odd that his biggest object to purchasing a larger home was actually the reason he should be buying "up". As I have explained before, the math supports it.

I asked him what what his home was worth before the market corrected. He said 2 years ago it was purchased for about $265,000. Now he figures at sale he is looking at around $240,000. So he is looking at a "loss" of about $25,000. He just hates the thought of "losing" that money. So i asked him about the homes his wife had been looking at. I just gave him the simple round number math. Look if you are taking a 10% hit on your house at $250,000 you're on paper down $25,000. Now your looking at homes that would have sold for at least $400,000. So on paper that owner is looking at a loss of $40,000. $40,000 minus $25,ooo equals $ a net gain of $15,000 for him.

So moving up in a down market has it's benefits. The biggest one being keeping his wife happy! I also let him know that he might qualify for the $6,000 tax credit for move up buyers. You couple the money on the table to a 30 year interest rate under 5% and all of the sudden it looks like moving up is the smart play.

No comments:

Post a Comment