Buyers- How Much is It Costing you to keep Waiting to Buy! 90274,90275,90505-$275K?

Yes, you read this right. I predicted that the buyers who were still waiting needed to stop 6 months ago.

http://activerain.com/blogsview/487163/Interst-Rates-up-Dont 4/28/08

Courtesy of Google, moneytips.com

Why because it is a common known denominator in this down turned housing market that rates will go up when prices go down. Just as rates are going up now.

As a buyer in the South Bay you need to do the math and see that waiting is costing you money. Unless you can predict the interest rate future, it does not look like it is going down. Don't wait.

I have worked in this market for over 25 years and seen interest rates at 17% in 1981, 7% jump to 11% in 1986 and now from 2005 to 2008 we have watched interest rates go from 5% to 6.75% and more.

What this means to you the Buyer:

House in the South Bay -Example: Torrance 90505

Torrance Homes- Sale Price 2006- $950,000.00 with 20 % down(190,000.00)

760,000.00 Loan at 5% Pymt. $3166.66 Int. per month

Same home in 2008 8% drop in price-$874,000.00 with 20% down (174,800.00)

699,200.00 Loan at 6.75% Pymt. 3933.00 Int. per month

You say I saved $56,000.00 by waiting to buy but did you really?

Now your loan costs you more in interest and here is where you lose more by waiting.

Buyer 1 pays $1,139,997.60 over the 30 year life of the loan, purchased in 2006

Buyer 2 pays $1,415,880.00 over the 30 year life of the Loan purchased in 2008.

($56,000.00) in Sale Price

A loss of $275,000.00 over the life of the loan by Buyer #2.

Don't gamble on the interest rate, the only one saving money in this market is all cash buyers.

If you are not an all cash buyer than I suggest you buy now and don't risk your interest rate and loan approval. Lenders have made it very difficult to qualify but I am predicting that they will loosen up in the next few months so stop renting and buy your dream home asap.

Here is my sources from Trend Graphs that I used to estimate the Sales in 90505.

2005Avg. Active Price	912	908	915	899	898	899	905	920	911	891	892	886	901	903	899
Avg. Sld Price	917	905	878	908	893	901	914	884	888	913	906	895	880	900	893
Avg. Sq. Ft. Price	364	476	459	350	393	457	445	482	395	375	468	406	465	426	400
Sold/List Diff. %	100	99	99	100	102	100	97	100	99	99	98	99	97	98	98
2008Avg. Active Price	882	881	897	888	888	886	906	897	882	905	900	900	905	890	886
Avg. Sld Price	883	904	908	885	0	912	885	897	877	0	880	907	0	884	895
Avg. Sq. Ft. Price	471	400	424	455	0	442	720	547	406	0	450	427	0	415	352

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