The High Cost of Waiting

Quite a few would-be homebuyers tell me they’re ready to buy, but not before they’re positive prices are as low as they are going to go.  I certainly understand where they are coming from and would love to be able advise them exactly when that will be—or was.  No one wants to spend more than they have to on any purchase, especially one of this magnitude.

Unfortunately, even the best financial minds can’t say with complete certainty when prices will finally level out here in Sarasota-Bradenton.  Many believe they already have and local statistics tend to bear this out.   According to monthly statistics compiled by the Florida Association of Realtors, ours is the ONLY market in Florida that has been consistently showing an increase in unit sales versus this time last year.  That trend began last December and continues today.  But even if prices were to roll back by a few more percentage points—which is doubtful—you could unwittingly increase your final cost of ownership by not locking in on today’s low mortgage rates. 

Why?   Although biding one’s time seems like the smart thing to do in a transitional market, betting that mortgage rates will cooperate—by remaining historically low—isn’t.  Rates are already trending upwards again, with financial pundits expressing scant optimism they’ll retreat any time soon.

Even the smallest jump in interest rates can be costlier than it appears at first glance.  If you secure a 30-year fixed-rate mortgage in the amount of $600,000—with an interest rate of 6.75%—your monthly payment, with principle and interest, will be approximately $3,870.  If the rate creeps up a point to 7.75%, the monthly payment suddenly leaps to $4,270, or an additional $144,000 over the life of the loan.  Likewise, if you are comfortable budgeting no more than $3,870 each month for your mortgage payment, you must now reduce your asking amount to $543,680 and bring more cash to the closing table.   Or start searching for a lesser-priced home.  

It’s that simple.  Rising interest rates mean less purchasing power and can even compromise how much home you are ultimately able to buy. 

Now is the best time in years to buy real estate in Sarasota.  Which makes it an even better time to explore your borrowing options.  The experts at MS&C Mortgage will be glad to help.  We’re a division of Michael Saunders & Company and an affiliate of Wells Fargo Home Mortgage, the nation’s leading retail mortgage lender.  Besides offering exceptional service, with flexible financing to meet your specific needs, our goal is to help you get the most out of today’s low home prices by offering financing that is every bit as attractive and comfortable to afford.

Months from now, don’t find yourself muttering that age-old lament we too often hear from people who missed the boat in previous buyers’ markets:  “If only I had bought when I had the chance.”  Don’t let rising interest rates ruin your chances to buy your ideal home, or consume every penny you had hoped to save by waiting.  Like the ad slogan says, “Don’t wish you had, be glad you did.”



  • User Gravatar Henry Shao
    July 11th, 2007

    I just published an article about Sherman Oaks real estate, in comparison to the Encino real estate market. It has lots of statistics of the key elements of those areas, such as $/sf, median days on market, etc. You may find the article at:



  • User Gravatar W. Donnenwirth
    July 11th, 2007

    As a potential out of state purchaser of a home in the Sarasota area, I am troubled by the constant “Time to Buy” harangue by the realtors. Yes, interest rates may go up but, if history is any indication, there will be opportunities during the life of the mortgage to refinance to a lower rate. However, if one purchases a property at too high a price, there is no similar opportunity to correct the mistake. Right now the absorption rate on houses in the MLS is approaching two years and each month more homes are listed than are sold. Given this environment, what makes anyone think that home prices have any place to go but down. Homes in Sarasota still reflect the run up by speculators that occurred during 2004-2005. Until home prices are reduced to reflect 2002-2003 prices, plus a reasonable return to the owner, purchasers such as me will stay on the sidelines. Right now is a “Time to Buy” only if you are a realtor.

  • User Gravatar dwl
    July 19th, 2007

    W. Donnenwirth, you present some excellent points in your comment. Please consider for a moment, Sarasota sales the first five months of 2007 are 14% higher than the same period in 2006. While other markets in Florida posted negative numbers for the same period. May 2007 closed sales are up 56% compared to December 2006. Pending sales, one of the first indicators of a recovering market have been on the increase since January 2007. Factor in a potential increase in interest rates which will reduce buying power and see if perhaps your view may soften a little in favor of the opportunities.

  • User Gravatar Peter Salefsky
    July 19th, 2007

    Connecting with Buyers and Sellers is one of the most important aspects of the real estate business. The second most important aspect is building a relationship of trust. People like to do business with agents they know, like and trust. Once the client is comfortable with their agent they can proceed with confidence.

    As an agent, it seems to me, that in this current market, we are still one step ahead of many buyers and sellers with the “Time To Buy” campaign. I do feel, however that this is the “Time To Make Offers”.

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