It has been about a month since Sept. 11, 2001. It seems like just a day ago; it seems like another lifetime. To express our sympathy and support for all those affected is only appropriate. To grieve and pray and talk about it is what can help us cope with such a devastating tragedy.
Many people have come to me in the past 10 days or so and asked me about the state of real estate in our market. We all are still wondering exactly what the terrorist attack will have on the overall economy and the real estate market.
A few statistics may shed some light on our situation. At this date in 2000, 630 homes sold -- while 639 have sold so far in 2001. During the specific time period of Sept. 11 to Oct. 8 in 2000, there were 68 sales, while we only have 57 this year.
During the week immediately following Sept. 11, the market did slow considerably. However, in the recent days the phones have begun to ring again. While quizzing a fellow Realtor, she mentioned that she thinks one of the biggest differences since the crisis is that the buyers coming in are really serious about buying rather than just looking.
Nationwide published rates the week following Sept. 11 dropped to 6.39 percent on the 30-year fixed rate average and 5.99 percent on 15-year. Local lenders were offering extremely attractive rates still in the week of Oct. 9 at 6.5 percent on 30-year fixed rate and 6.0 percent on a 15-year fixed rate.
Low interest rates usually translate into stabilized market prices for sellers and more buyers being able to buy more house than they could have a few weeks ago.
Should we buy?
Of course it seems very self-serving for me to say "yes." However, consider what a payment on an average home selling at $114,800 with the 6.5 percent interest rate on a 30-year fixed with only 3 percent down payment which equals $3,444 would be only $703.85. There are numerous loan programs available now as well with 0 percent down payment. So, a family could easily purchase a home for the same or less than they would pay rent.
The additional tax advantage, getting to deduct almost the entire payment because it is mostly interest the first few years, from your income tax makes purchasing a personal residence the most beneficial financial decision most people ever make. The uncertainty about what the financial future holds does not change that. If you cannot continue to pay your rent, will your landlord allow you to stay? The known advantages far out way the unknown risks.