In response to a request from a reader named Kevin, I am going to address the issue of home values in Colonialtown. In zip code 32803 from November 2010 to December 2010 there was over a 25% increase in the price per square foot of sold homes, rising from $105/psf to $120/psf. This uptick indicates that home prices are beginning to stabilize, meaning we should not see further significant declines. This isn't to say that there won't be some fluctuation, but it seems that 2011 is going to be the bottom of the market.
However, buying power is not simply limited to housing prices. One must also consider interest rates, which are currently at historical lows in the 5s (and I want to give a shout out to all of my readers who were smart enough to buy when the rates were in the 4s. When combining prices with interest rates, you probably got the best buys of anyone!). When considering the best time to buy, it is important not to base it all on price, because your interest rate is what is really going to determine the final price you will ultimately have paid for your home once you have paid off your mortgage.
For buyers, your buying power is at its highest while prices are hitting their bottom and interest rates are low, and that time is now. For sellers, you can rest easy knowing that your home should not continue to lose much more value.
Thanks, Kevin, for your question. Please keep the questions coming!
Thanks for the response!I was lucky enough to get in when the rates where in the low 4% range. It will be interesting to see what happens to home prices as interest rates rise.
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