Should I buy in Santa Fe? Or should I wait to buy till the market cools down?
by Jerome Leyba
on Thursday, July 16th, 2020 at 9:51pm.
When is the right time to buy? Should I wait till the market takes a turn? What about interest rates?
All good questions to ask. In the end, the main question is.....Do interest rates outweigh the cost of purchasing in a Seller's market?
So here is something cool to think about. Many of our clients say they want to wait until the market cools down. Give a little time and see if they can save on their home purchase. When we are asked this question, it is hard to judge and adds a lot of subjectivity to the answer. The current Santa Fe Home Market has stayed strong even with COVID. So far we have not seen medium prices fall, they have stayed consistent and even raised in some cases 3-6% in current market value.
So is buying a Santa Fe home a good idea even if prices have increased?
Let's compare rates and prices and see.
Here is a scenario House A in last year's market is priced at $300,000 and will use an adjusted rate APR of 4.51 for our model.
House A in the current market has a 3% increase of $309,000 with a stronger rate of 3.204 APR So how much of a difference is there? Let's calculate!
We have used a standard mortgage calculator to take into consideration standard fees insurance etcetera.
As you can see the higher-priced home by 3% still nets a higher payment. So that tells us we will be paying less on the entirety of the loan.
When you compare the final payoffs on the note you see how much money you save over time. In the end, the higher-priced house still saves you over $40,000. So the rate must be taken into consideration when purchasing your home.