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Health & Fitness

Real Estate Market Rebounds, Buying Power Rapidly Diminishing

As predicted, the housing market has finally started to rebound.  The price of your home is worth more now than it has been in years! In just the past few months we've seen a huge increase in property value. Which has some potential sellers curious as to whether they should sell now, or wait for the value to go up even further. 

At Coastal Properties Group, we are constantly monitoring the trends in the housing market to help educate our clients on when is the best time to buy or sell their home. While you may have the upper hand as a seller, there are a few things to keep in mind. 

Starting with the fact that interest rates are on the climb. The average on the 30-year loan edged up to 4.40% last week, from 4.39% the week before. The rate is a full percentage point higher than in early May, when rates neared record lows. Which means buying power is rapidly diminishing. The rates may remain low by historical standards, but it will influence your potential buyers.  

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For example, let’s say a couple is looking to purchase a home with a monthly payment of $1515. They were able to look at houses up to $350,000 when the interest rate was at 3.5%. As interest rates get higher, that same couple’s budget will not fluctuate & will have to keep their monthly payment at $1515. Therefore, the price range they will be looking in will get lower. At current rate of 4.5%, they are now going to be looking for a house in the $310,000 price range. That’s a drastic difference if you consider in May 2013 they would afford a house $40,000 more than they would be able to afford right now. (See Buying Power Rapidly Diminishing image attached) 

The other point to consider is the cost of ownership. If your home was worth $300,000 last year & you had an interest rate of 3.5%, your monthly payments would be $1,299. Now this year, the price of your house has increased to $330,000, & the interest rate has jumped to 4.5%. That means the monthly payments would now be $1,613. In just one year, the cost increase of owning is 24%. If the price of your house next year is valued at $363,000 and the interest rates go up another point, the monthly payments would be $1,988. Now in just 2 short years, the cost increase is at 53%. (See Cost of Ownership Increasing Rapidly image attached) 

Find out what's happening in Largowith free, real-time updates from Patch.

When we tell you that now is the time to sell, we aren’t just guessing, we know it’s a sellers’ market. You may have tried to sell your home before and were unsuccessful, or maybe you thought about selling but it wasn’t the right time. Well, we can assure you that now is a great time to put your home or condo on the market. 

Remember there has been a 10-20% increase in prices over the last 12 months! Underwater Mortgages fell by nearly 2 Million Homes last year. Considering the 10-20% price gain we’ve already experienced; if we added an additional 10% price gain it will reduce underwater mortgages by another 40%!


About Coastal Properties Group 

Coastal Properties Group International, one of the area’s most successful and fastest growing real estate brokerages in Pinellas County, is an invitation-only boutique brokerage made up exclusively of multi-million dollar producers. The exclusive affiliate of Christie’s International Real Estate for the Tampa Bay Region, Coastal Properties Group International specializes in waterfront and luxury properties and estates in Pinellas County and surrounding areas.  The company has five offices throughout Pinellas County including Clearwater Beach, Dunedin, Palm Harbor/East Lake, and Belleair.  The firm is dedicated to providing exceptional service to its clientele while employing intelligent use of technology to market its portfolio of outstanding properties. For more information, please contact Alex or Laren Jansen at 727-474-9071.

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