Philadelphia Real Estate Market Data
Philadelphia real estate expert and Prudential Fox & Roach Chairman and Chief Executive Officer Larry Flick recently released his Fall 2011 Chairman’s report which discusses where we are currently and where things are likely to go in the following months. Very few individuals have more experience and knowledge of the Philadelphia real estate market so Larry’s advice is usually right on point. The entire document can be found here.
• Would a different home better meet your needs under your present personal circumstances?• Do you feel secure in your job?• Would you like the security of a long term investment?• Do you like to save money?• Would you like more control over your future?If you answered mostly “yes,” then the time to buy a home is now. In fact, there has never been a better time to buy than now. Low house prices and the lowest mortgage rates since the 1950’s have converged to create an unprecedented opportunity.
Larry then addresses the question of whether or more home value will be lost in 2012.
Philadelphia Real Estate Blog – Buy Now!Well, yes, and no. Home prices are bumping along the bottom. Yes, they may go down a bit more, so if we could be certain that mortgage interest rates would stay at the extreme lows we see now, then yes, theoretically it might make sense to wait. But, and this is an important consideration, we have not seen mortgage rates this low since the 1950’s! As our economy improves — and it will — rates will go up as well. If they rise by 1% from what they are now, they would still be considered low, but not the historic lows they are now. Understanding the risk of waiting is essential to a thoughtful decision, because today’s record low interest rates mean appreciably lower monthly payments. Not just for now, but with each mortgage payment made month after month, year after year.
And finally does it make more sense to buy now or to wait until next year?
Think of it this way: do the potential savings of an interest rate that is 1% below what it might be in the future exceed a potential decrease in the price of a house? That may sound complicated, but let’s do the math: In 2010, a survey by the National Association of Realtors concluded that the average length of time we keep our homes has risen from seven to eight years. This increase is attributable to the trend of consumers viewing housing as more of a long term investment. In fact, the survey revealed that most first time buyers plan to stay in their home for ten years, and repeat buyers expect to remain 15 years. No one can really know that a market has hit bottom until after it has occurred, but I believe the risk of home prices coming down more than moderately is very slight. Even if they decline a percent or two, any additional minor price erosion pales in comparison to the disadvantages of an increase in interest rates.
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Blog post compliments of CenterCityTeam’s Philadelphia Real Estate Blog
Frank L. DeFazio, Esquire
Prudential Fox & Roach Realtors – Society Hill
530 Walnut Street, Suite 260
Philadelphia, PA 19106
215.521.1623 Direct
610.636.4364 Cellular
888.308.1148 Fax
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www.CenterCityTeam.com
