Here’s Why Waiting for Home Prices to Drop May Not Save You Money

It’s no secret home prices in the Sarasota area have risen significantly in the past year or so. In fact, that’s true almost nationwide thanks to the trifecta of low interest rates, high demand for homes, and a shortage of building materials. Add the work-from-home factor and the labor shortage and it’s more like a…quintfecta…? Anyway, I understand it can be discouraging to find yourself bidding against other buyers and it may be tempting to delay your home search. You may even be hoping for a dip in prices to make buying more affordable. My advice to you: Don’t wait for a price dip that may never come.

Here’s why it’s important to stay focused on your search and power through. For the sake of round numbers, let’s take a $500,000 house at 3% interest for 30 years, that’s $2,100 per month for the mortgage payment. Let’s say you wait for prices to dip, and let’s be super optimistic and say prices dip and that house drops to $450,000 (an unlikely scenario, but let’s go with it!). It’s likely that interest rates will have risen as the price dipped, so now you’re looking at, let’s say, 5% interest on that same house. That payment is $2,400 per month. Even though the price is lower, the payments are higher. Yep, that’s really how it works.

If you’re thinking, “Christine, that can’t be right!” I promise you it is. Please play around with the mortgage calculator and see for yourself!

Then call me, because we have work to do! Let’s find you that home in Sarasota, Bradenton or Lakewood Ranch while rates are still low!