If you’re a buyer in our current market, there are two variables that will affect you the most in 2018.
The first is if we have the same growth in the average sales price and the appreciation of houses that we saw the previous 12 months, which was 11.9%.
For example, if you’re looking at a house worth $200,000 in January, that same house next December will be worth about $225,000. If you’re looking at a house worth $400,000 this January, by next December that house will be worth just under $450,000. If you’re interested in a house worth $600,000 this January, it will be worth $675,000 come December.
The second variable that will affect buyers, especially as prices increase, is interest rates. For every 1% increase in interest rates, the mortgage payment for that same $200,000 house I mentioned earlier rises by $119. For the $400,000 house, it would increase $238. For the $600,000, it would increase $357.
On that note, let’s talk a little more about interest rates. As our economy heats up, the government becomes fearful of inflation. To check inflation, they raise interest rates to slow the economy down. Basically, they make us pay more for our money so we spend less money. With the strength we’re seeing in our economy, our stock market, and the housing market, I think it’s a safe assumption we’ll have some upward pressure on interest rates.
If you’re a buyer, this means you’re probably better off buying early in the year rather than later.
Whether you’re a buyer or seller and you’re thinking of making a move in our market soon, don’t hesitate to reach out to me. I’d love to help you.