The Cost of Waiting for Prices to Fall

The Cost of Waiting for Prices to Fall 

source: by The KCM Crew on February 11, 2011 · Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.

The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.

PRICES

The National Association of Realtors (NAR) released their 4th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year:

The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.

A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.

INTEREST RATES

The Primary Mortgage Market Survey was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said:

“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”

So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?

The price is the same. It just costs more.

Let’s show you what the news means:

By sitting on the sidelines for the last 90 days a purchaser lost:

  • $89.44 a month
  • $1,073.28 a year
  • $32,198.40 over the thirty year life of the mortgage

If you buy a $340,000 home, double all these numbers.

Bottom Line

Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.

Attention All KCM Subcribers:

Pages depicting the above information along with an additional 20+ pages for your Buyers’ Conversational Manual are in KCM’s February Edition available now. If you haven’t already done so, download the pages for your Listing Conversation Manual available in the January Edition.

Not yet a subscriber? Click here.

Two Familiar Names Continue Leading RE/MAX Residential Top 10 Through 3rd Quarter

Chicago Agent Magazine  21 October 2010 No Comment

 

// Through the first three quarters of 2010, two familiar names among suburban Chicago real estate agents remained atop the residential real estate sales rankings in the RE/MAX Northern Illinois network: Jane Lee of RE/MAX Top Performers, Lake Bluff, Ill., and Edward Lukasik, Jr., of RE/MAX Professionals, Bolingbrook, Ill.

Lee heads the top-ranked sales team.  Teams rely on the combined efforts of two or more licensed agents.  Lukasik is the sales leader among agents who are the sole licensed contributors to their sales production.

Lee and Lukasik also were ranked number one for all of 2009.  Rankings are based on commissions earned.

“Jane, Ed and all of our Top 10 agents are representative of the outstanding market knowledge, business experience and outstanding client service that has kept RE/MAX the real estate leader in the metro Chicago real estate market and all of northern Illinois,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. “These agents have the skills and determination to succeed even as the current real estate market presents some unprecedented challenges.”

The RE/MAX Top 10 residential agents for the first nine months of 2010 are:

No. 1 – Edward Lukasik, Jr., RE/MAX Professionals, Bolingbrook;

No. 2 – Connie Ritchie, RE/MAX Suburban, Schaumburg, Ill.;

No. 3 – Marsha Ulbrich, RE/MAX Unlimited Northwest, Lake Zurich, Ill.;

No. 4 – Charles Ivas, RE/MAX Elite, Hinsdale, Ill.;

No. 5 – Joyce Courtney, RE/MAX Great American North, St. Charles, Ill.;

No. 6 – Kristi Gunther, RE/MAX Exclusive Properties, Chicago;

No. 7 – Sharon Gidley, RE/MAX Unlimited Northwest, Algonquin, Ill.;

No. 8 – Robert Padron, RE/MAX Cityview, Chicago;

No. 9 – Lynn Fairfield, RE/MAX Suburban, Libertyville, Ill;

No.10 – Linda Price, RE/MAX of Naperville, Naperville, Ill.

The RE/MAX Top 10 residential teams for the nine months of 2010 are:

No. 1 – Jane Lee, RE/MAX Top Performers, Lake Bluff;

No. 2 – Leslie McDonnell, RE/MAX Suburban, Libertyville;

No. 3 – James Kennedy, RE/MAX TEAM 2000, Orland Park, Ill.;

No. 4 – Matthew Kombrink, RE/MAX Excels, Geneva, Ill.;

No. 5 – Andee Hausman, RE/MAX Experts, Buffalo Grove, Ill.;

No. 6 – Marge Pawlak, RE/MAX Enterprises, Downers Grove, Ill.;

No. 7 – Marco Amidei, RE/MAX Suburban, Libertyville;

No. 8 – Cindy Banks, RE/MAX Cornerstone, West Chicago, Ill.;

No. 9 – Alex Rullo, RE/MAX Great American North, St. Charles;

No. 10 – Bernie Cobb, Jr., RE/MAX of Naperville, Naperville.

RE/MAX is the leader in northern Illinois real estate sales.  It has been number one in the metropolitan Chicago real estate market since 1989, closing more than $6 billion in sales last year.   The RE/MAX Northern Illinois network consists of 2,500 associates and 120 individually owned and operated RE/MAX offices that provide a full range of brokerage services throughout the northern one-third of Illinois.  Its www.illinoisproperty.com and www.remax.com websites are leaders in consumer visits among real estate brokerage brands.  The northern Illinois network is part of RE/MAX LLC, a global real estate organization with 91,000 sales associates in 83 nations.

Source: http://chicagoagentmagazine.com/two-familiar-names-continue-leading-remax-residential-top-10-through-3rd-quarter/

 

Lynn Fairfield, RE/MAX Suburban | 1344 South Milwaukee Ave., Libertyville, IL 60048 | 847-367-8686 | Contact Me by E-mail