Have You Heard About the Herd?

In addition to the abundant supply of homes, there are also several types of mortgages from which buyers can pick and choose. Interest rates have fallen again and again in the past several months. That’s probably the reason why the number of mortgage applications rose so steeply during January – maybe some buyers think that the herd will be following.

When buyers wait and use a “follow the herd” mentality, it usually means that they will be buying at the top of a real estate cycle, whether it’s a new home, second home or investment property. So why not buy now, ahead of the herd?

If you are thinking of buying a home, a real estate investment is low risk compared to other types of investments. For instance, the national median price of homes bought ten years ago has increased 88 percent, and most property owners in this area of the country enjoyed appreciation of more than that in the past ten years. Homeownership is a safe, secure way to build long term wealth.

Have you ever wondered why some consumers seem very comfortable spending $40,000 for a car, knowing full well that in a few years they will lose $20,000. And yet they will avoid buying real estate for fear that the value of the property might go down. This theory is flawed, as all car owners know, because the depreciation of a car is a sure thing, while the reduction in value of real estate is very difficult to predict. The bigger issue is that when a car depreciates, it does not regain its value, whereas real estate might decline in value today and appreciate six months from now to an even higher value than when it was originally purchased.

As I said previously, how many more reasons do you need to buy NOW? Contact a member of the Hilton Head Area Association of
REALTORS® today!