Buy Now, Orlando, Tax Credit or Not

If you didn't buy an Orlando home before the tax credit expired, you may be thinking, "What's the rush now? If I just wait another year, I will have so much more saved." In theory, this might be true, although most people find it's hard to meet savings goals; the car transmission might die or unforeseen expenses might arise. If your income isn't stable, you should wait but aside from this possibility, is waiting a sound strategy?

Otherwise, there are many reasons that the answer is a resounding "NO!" Why is this? Florida and national statistics tell the story.

Housing prices: Florida Realtors (formerly the Florida Association of Realtors) reports that median home prices fell only 4% from last April to April 2010. Condo's only fell 2.7% from last April. The Homebuyer's Tax Credit might have kept housing prices up because in certain price brackets, there was competition for homes. If this stability holds, buyers may not be able to count on much lower prices next year.

Interest rates: Mortgage rates were expected to rise once the Federal Government stopped buying mortgage based securities in March, 2010. This is likely to happen over the next year, but now rates for the 30 yet fixed conforming mortgage in the Orlando area average 4.635% A interest rate increase of 2% could up your mortgage payment by hundreds of dollars a month.

Mortgage vs. rent trade off: Homeownership has many non-economic benefits, such as feeling the pride of ownership, a stable home for the family, maybe more space or more yard. The traditional financial argument for buying a home vs. renting for another year has always been that when you weighed the mortgage deduction and increasing equity against the cost of paying rent, buying makes sense. These days many condos are available for less even than homes; the median condo price in Orlando is $52,300, as compared to a median price for a single family home of $135,900.

Apartmentrattings.com shows that the average rate on a one bedroom apartment is $730, while a two bedroom is around $842. Given current mortgage rates, a $150K home would have a payment of about $840, a $200 K, $1,090, and $300 K, $1,690 assuming a conventional loan with 5% down. The payment would be less if you went FHA. On the face of it, you might still come out ahead by buying. If you buy now rather than waiting, your money will go toward something you own.

Other factors: Of course, a few other things factor into whether you should buy now. Are finding a home you really like? If you see nothing near your price range, you need to wait. Especially given recent history, you do to want to stretch too much outside your comfort zone. Is the home one that you could resell if you needed to?

Even if you planned on to waiting till you have a bigger downpayment, you can buy now and pay down your mortgage. If everything checks out, you have an opportunity to buy at a great price with reasonable interest. I'm Janice Petteway and I believe that buying Florida real estate is a great way to live out the American Dream for you and your family. If you are prepared to take on homeownership, affordability , and interest rates on your side. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities.