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Archive for the ‘market conditions’ Category

Interest rates are low- super low. How low? Low enough you can pay today’s prices for a smaller payment than 2008 prices with 2008 interest rates.

Last week’s rates for a 30 fixed with 20% down and a half point was 3.625%. With good credit of course. A few weeks ago you could get a conventional mortgage for only 3.5%

But they won’t stay this low forever. As the housing market, and economy in general, improve the rates will go up. I doubt they will ever get back up to the 9+% they were when I got my license, but to put things in perspective the average rate during peak price time of 2003, 04, 05 was right around 5.8%. The National Association of Realtors (NAR) projects interest rates will get as high as 5.4% by the end of 2015.

What this means for you, the home buyer: If you can afford a $500,000 house today you will only be able to afford $405,000 at the same payment. You don’t like what you’re looking at for $150,000 today, be prepared to stay under $120,000 if NAR is right.

See the charts below for an idea of how your buying power diminishes as interest rates go up.

buyers purchasing power 300k March 2015buyers purchasing power 150k March 2015buyers purchasing power 500k March 2015Jackie@JackieHawley.com
(248)736-6407
www.Search-The-MLS.net

www.MiRelocation.com

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I advertise my listings on Zillow- it’s a great site for my Oakland County home listings to get exposure. Zillow is one of several sites I advertise on.

Many of my Oakland County home buyers look for houses on Zillow and those same home buyers inevitably check the value of prospective homes with Zillow’s famous “zestimate.”

A zestimate basically takes the sale prices of homes in a certain radius and average the prices and calculate by price per square foot. Some may be on the water, some may be on main roads, some may be on acreage, foreclosures are included. It’s an average of ALL houses in the area.

As your Oakland County agent, I will advise you as to the value of any houses you consider making an offer on. I will give my opinion as to what I think it will appraise for and what I think market value is. The ultimate value is up to you.

I wish it was as easy averaging the sales within a half mile or mile and coming up with a price!

So you want to look at Oakland County MI homes on Zillow? Look away! But PLEASE ignore the zestimates!

Search the MLS

Oakland County MI Homes For Sale

What To Expect From Your Oakland County Buyer’s Agent

Financing and The Importance of a Pre-Approval

Jackie Hawley Realtor
Cell: (248)736-6407
Jackie@JackieHawley.com
www.MiRelocation.com

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How Much Does The Interest Rate Really Affect Your Buying Power?

I am going through old listings that couldn’t sell at the owner’s desired price and through files of home owners who didn’t try to sell after getting a market analysis (CMA) for their home because of the value at that time. The good news for those homeowners is that prices are coming up in the Clarkston area and have been for the past couple years. But for buyers- if you look at your payment instead of price- prices are still very low.

As an example I just pulled up a listing I had in 2007 that was asking $400,000. At that time the interest rate for mortgages was at an average of 6.34%. When I checked the Freddie Mac web site I found the average interest rate last month was 3.92%.

What does this mean from the buyer perspective? If you would have bought that particular house for $305,000 in 2007 your payment (principle and interest) would be the same as if you were to pay $400,000 today. That’s a hundred thousand dollars worth of buying power just in the difference in the interest rate.

But it gets better!!! The property taxes on that house have dropped from just over $6k/year to just over $4600/year. That’s $116/month savings in your house payment.

Interest rates are not going to stay this low forever. Home prices are on the rise– not skyrocketing, but steadily rising. If you have been holding off buying waiting for the market to hit bottom I think we may be there- especially when you factor in the mortgage interest rate and property taxes. AND the cherry on top is the fact that your property taxes will be capped to 5% or the rate of inflation as long as the house is your primary residence. So for the example above it will take quite a while before property taxes are back at 2007 amounts.

Clarkston Lakefront Homes For Sale

Waterford Lakefront Homes For Sale

Lake Orion Lakefront Homes For Sale

For Buyers

For Sellers

Search The MLS

Buing a Foreclosure or Short Sale

Jackie Hawley
ReMax Encore, Clarkston
Jackie@JackieHawley.com

Cell: (248) 736-6407

www.MiRelocation.com

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