I get a lot of real estate questions during work, at dinner parties, at kid’s birthday parties, from friends, from family- about the current real estate market here in Charleston. The number 1 question that I’ve been getting lately is:
When are we going to see the bottom?
Well, if I had a dollar for every time I’ve heard that question. The short answer is: I don’t know, but it could be now, depending on other factors, or your current situation. I want to put something out there that I hope you buyers will take into account when considering purchasing at “the bottom”. Know that every person’s situation is different when timing the market- but let’s look at one factor. Do not only think in terms of home values when determining “the bottom”, but also take in to account whether the interest rates are moving as well. Consider this:
- A $200,000 loan amount at 4.5% for a 30 year fixed mortgage has a principle and interest payment of $1,013.37 for a total of $164,813.83 in interest over the life of the loan.
- A $180,000 loan amount at 5.5% for a 30 year fixed mortgage has a principle and interest payment of $1,022.02 for a total of $187,927.28 in interest over the life of the loan.
As you can see, while the second scenario has a home that has come down significantly in value- by the interest rate going up 1%, it makes the home more expensive than in the first scenario. Keep that in mind when trying to time the market, and talk to me about the other 5 factors that you need to take into account when timing for that perfect purchase. The rule of thumb is: Don't try to get it perfect. Buy a house for a home.
Mike Ciucci specializes in the Charleston SC real estate market. He has been a Charleston realtor for over 15 years, focusing on quality and attention to detail his clients have come to expect.