Is Waiting To Buy A Home Costing You?
If you’re one of the people that has decided to wait to buy a home for whatever reason, you may want to reconsider. Waiting to buy a home in San Diego can cost you upwards of $42,000. If you are waiting then I suggest you ask yourself the following to questions to see if that wait is worth your time and money.
Where Will Home Prices Be In The Next 12 Months?
Most experts believe prices will continue to rise in 2022. Some are even expecting the crazy double digit appreciation we experienced in 2021 will continue! However, I like taking a more conservative approach. If we take the average of the top expert’s predictions, we get a 5.1% estimated growth which is more sustainable than what we have been experiencing.
Where Will Mortgage Rates Be In The Next 12 Months?
Rates have already started to increase this year. Some experts are anticipating rates being around 3.7% or higher at the end of the year. The higher the rate is, the more you will be paying for your home.
What Does This Mean For Potential Buyers In San Diego?
If we apply those expectations to the housing market in San Diego, it can be costing a buyer $42,200 to wait just one year! Please see below for the breakdown.
Current Median Price in San Diego : $750,000 X Expected Average Appreciation: 5.1%
Expected Price by end of 2022: $788,250
That is a difference of $38,250 more you could be paying for the same type of house just in sales price alone.
Now let’s look at the impact mortgage rates will also have.
Scenario with January pricing and Mortgage Rates
Median Price in San Diego : $750,000 at Current Mortgage Rate: 3.25%
Estimated Monthly Payment: $3,542
Scenario with Expected Growth and Rates
Median Price in San Diego:$788,000 at Anticipated Mortgage Rate:3.75%
Estimated Monthly Payment: $3,890
That is a difference in payment of $348 more per month, which is equal to $4,176 per year! Add that to the additional $38,250 you’re already paying for the home and waiting a year just cost you $42,426. That’s an expensive decision if you ask me.
Obviously everyone has different needs, goals and budgets. Feel free to reach out if you would like to have a discussion about how this applies to you and your current situation.