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Buy or Sell Now? RISK vs. REWARD

Posted by The PerfectHouse Team on Sunday, March 16th, 2014 at 3:09pm.

Uncertainty breeds confusion and interrupts our ability to access Risk vs. Reward.
It's really not complicated, inject uncertainty in to any market and you upset the natural balance of Supply & Demand. Currently, uncertainty is at an all time high at almost every level in most households.
In My opinion the single largest risk to our Hampton Roads Real Estate Market is shared by both Home Buyers and Home Sellers.
The Wild Card that is creating serious risk are Mortgage Interest Rates. Rate Changes are the anvil hanging over the head of our local recovery. History can be our guide, over the past 30 years when mortgage rates come off of low rate periods they have risen quickly and dramatically in the majority of cycles.  
Current Hampton Roads Market Facts...
  1. 1305 homes Sold in Febuary 2014. 
  2. Home Sales are down over -12% from the same period, Feb of 2013. 
  3. Supply (Homes For Sale) is Up +2.7% over Feb. 2013
  4. Homes are taking longer to sell so far in 2014
  5. Virginia Beach is showing the strongest demand from $100k-$500k price ranges.
Fact: When the Federal Government eases or discontinues printing money to guarantee Home Loans Mortgage Rates will rise dramatically as private investors re-enter the conforming Mortgage Markets.  Why? "For Profit" institutions do not do business for a guaranteed loss. They weigh Risk vs. Reward and price accordingly.  
So, what is the take away? With every 1% increase in Rate the Buyer loses an estimated $9,000 in buying power. Just a 3% increase equals a loss of -$27,000, applying downward pressure on the value of your home.

SELLERS: Consider if you must sell then do not wait for increased competition Spring brings or rising rates that will knock many or your current buyers out of your home's price range. Interview only Full Time Realtors that know the market and are full time professionals now and get your home in top shape for top dollar now
BUYERS: Waiting has possibly never carried this much risk. The largest factor many buyers and agents do not understand is not the price of a home but the "Cost Of Ownership Over Time", it's most impacted by your interest rate. Interview only Full Time Professional Realtors that understand the local markets, will listen to your needs and assist you with your long term home ownership plans. Compare Realtors and Lenders, their experience and service. Make Full loan application before you begin house hunting. Focus on the Best Location you can afford withing your plan. 

Moving is a vary personal decision, your circumstances and goals should guide your judgement as to the timing of your next move, not hype or headlines. Seek advice from local experts in their field and decide based on facts not emotion.


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