Though housing prices may not have hit rock bottom, says one expert, people who wait to find the market’s bottom are likely to miss out on the current low interest rates.
If you’re into bottom-fishing, now may be the time to start trolling for real estate. At least that’s the advice of Michael Corbett, author of “Before You Buy: The Homebuyer’s Handbook for Today’s Market.”
“I’m pretty comfortable saying that five years from now, people are going to be saying, ‘Damn, if I had just bought in 2011,’ ” said Corbett, who is also host of the “Mansions & Millionaires” segment on the syndicated TV show “Extra.”
Housing prices may not have hit rock bottom, Corbett acknowledged. But he thinks that people who wait to find the market’s bottom are likely to miss out on the current low interest rates.
And rates can be every bit as important to the cost of a deal as price.
You might think you can snag a great deal by lying in wait — hoping that the owner of a $500,000 listing will get desperate enough to accept $450,000, for example. But if interest rates rise 1% during the time you wait, you’ll end up shooting yourself in the foot.
Assuming you finance $400,000 of the purchase price of that home, the 1-percentage-point difference between a 5% mortgage and a 6% mortgage will cost you more than $90,000 over the life of a 30-year loan.
“It’s hard to tell where the bottom of a market is, until prices start going up,” said Diann Patton, a consumer real estate specialist with Coldwell Banker Real Estate. “But the stars are aligned for buyers right now.”