10/24/2022
remember how difficult the market was for buyers a year ago.
The average house was selling for more than 38k of the list price, waiving contingencies, and allowing the seller to live rent-free for up to six months.
Now buyers can buy at higher rates, but they are paying under the list price and getting all their closing costs paid.
Let’s look at an example more closely:
Assume a List price of $450K at the end of 2021. This house sold for $500K at a rate of 3.5% with a 20% down payment and closing costs of $10K.
Principal and interest is $1,796.18.
Today that scenario is a list price of $450K, selling for $425K with all costs paid for. Assuming a 20% down payment and a rate of 6.5%, the principal and interest is $2,149.03.
The difference is $353.00 a month in payment. But, if you look at the total cost for the increased price and costs in scenario 1, it’s 28 months to break even in terms of just the additional closing costs paid and 240 months to break even in the additional price difference + $10K in costs.
Every market has its winners.
Please let me know if you have any questions
I’ll be happy to help
