Speaking of Bang for the Buck…..

By John Mangas, Real Estate Broker with RE/MAX Preferred Toledo, Ohio

Can we agree that property values in metro Toledo have fallen over the past 6 years?

Would 30% be a fair number?

Have you heard that you can obtain a 30 year fixed rate loan for around 4%?

Did you realize that the same rate would have been around 5.5 – 6% just a few years ago?

So let’s assume that a buyer bought a $150,000 home 5 years ago and did FHA financing (3% down) and that they were able to obtain a 30 year fixed interest rate of 5.75%. The monthly principal and interest payment would be about $849. per month.

In today’s market, that same $150,000 home would sell for around $110,000, Additionally, the interest rate that today’s buyer is paying is around 4%. Staying with the same FHA 30 year fixed rate (3% down) scenario, the monthly P & I payment would be around $502 per month! That represents 40% more buying power!

TALK ABOUT BANG FOR THE BUCK!

We lose site of this because the market shift happened over an extended period of time and the change was gradual. The media has talked a great deal about lower property values but has failed to point out this very important part of the equation.  Today’s buyer has an opportunity to buy more home for less…PERIOD! As real estate professionals, we need to be educating the market and talking about this tremendous opportunity.

Housing affordability has not been better during the years that I have been a Realtor.  We can’t depend on anyone to speak this message louder than we do! If we become ambassadors for the housing market, we become a meaningful voice and help to drive the recovery! NOW is a GREAT TIME TO BUY!