While we wait impatiently for news on appraisals and closing experiences, we are left to wander through the news pages reading articles about the housing market. In today’s NY Times op-ed there is an article entitled : A Dream House After All. It starts by reminding us, as did MCL some posts back, that every market is different. While the average drop from housing’s peak was 30%, it varied from as little as 4.2% in Dallas to as much as 57% in Las Vegas. To me though, the compelling part of the editorial was what a great time it is to buy a home. Here is one paragaph that struck me:
Do the math. Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.
I like the numbers above. I really like them. The problem is I don’t know if they apply to me. I don’t know that I am going to get my unit at whatever the current market value is. I contracted to pay whatever the value was in mid-2000, not what it is today. And IF, and this is a big IF, IF the market has dropped say 30% for condos in Uptown Charlotte, there will probably never be a better time for buyers to acquire a unit at the Vue if prices drop after the pre-sales close.
What protection can one get if they in good faith close on their unit and then prices drop precipitously? I don’t have the answer. If you do, please share in a comment or write to firstname.lastname@example.org. Either way, if this is any consolation, once you are in, no matter what price you paid, all buyers get to share equally in the benefits of living in their new dream home!