With prices and interest rates at all-time lows, now is the time to look at homes for sale in Greensboro, NC.
A home purchase is typically considered to be a long-term investment. Yet, few homeowners approach the purchase of a home as an investor approaches an investment. Investors are always studying charts to determine when a market low has been reached so they can buy, and then follow the charts to determine when a market high has been achieved. Once the high has been established they sell their stock – resulting in substantial profits. By applying these same techniques, homeowners can achieve higher returns on their home purchases, as well. Let’s begin with a review of what has occurred in the housing market.
The housing market collapse of 2007 is one that very few can forget. Fannie Mae and Freddie Mac, both publicly traded companies designed to provide federal money to finance home mortgages, needed to be bailed out by the US government. Their stock prices plummeted to under a dollar per share. By September 2008, Lehman Brothers Holdings, Inc., a global financial services leader, filed for Chapter 11th bankruptcy protection, causing stock markets around the world to collapse. Foreclosures soared creating a financial tidal wave of bankruptcy filings and bailouts. Few, if any, markets were not affected by the market collapse.
The good news for buyers is that the 2007 housing collapse has caused mortgage interest rates and home prices to plummet. Thirty year fixed mortgage rates have fallen from a high of 8.5% in 2000, down to low of 3.75%. This equates to a significant decrease in monthly payments. For example, a $200,000 mortgage at an 8.5% interest rate resulted in a monthly payment of $1,537.83, resulting in a total interest payment of $353,614 over the course of the 30 year mortgage. Yet, the same mortgage at the lower rate of 3.75% results in a monthly payment of only $926.23 and only $133,444 in total interest. That’s a savings of over $200,000 just in interest alone and it gets better.
Because of the mass foreclosures that occurred in 2007 and 2008, home prices also fell. Homes that once sold for millions of dollars, were being sold for a less than a million. Statistics show that the market bottom for home prices was reached in 2011 and, since then home prices have started a slow, steady growth indicating that now really is the time to buy. This is also supported by recent reports showing a steady increase of existing home sales and new homes sales plus a significant decline in mortgage delinquencies.
Existing Home Sales, 2001 to 2015
New Home Sales, 2001 to 2015
Mortgage Home Delinquencies, 2006 to 2015
While home prices vary by area, the charts above indicate that overall the housing market has reached a low point. In other words, when comparing the home delinquencies with existing home sales, from 2007 to 2010, mortgage delinquencies increased and a spike in existing home sales, during this same period, is shown as investors were snatching up homes that were in default. Since the spike in 2011, there has been a fairly steady increase in both existing home sales and new home sales, yet mortgage delinquencies have fallen. The significance of this combination is that the demand for existing home sales will increase and, since delinquencies has fallen, the “supply” of existing homes sales will be dependent on homeowners wanting to sale their homes versus homes that were put on the market because of foreclosures.
If you are looking for a property for sale in Greensboro or a home for sale in Greensboro, then now really is the time to buy. Smith Marketing, Inc., is your best resource for homes for sale in Greensboro. We can provide you with the best resources and facts for important home buying decisions. Call us at 336-663-1320 to begin your new home search.
*Source for Graphs, www.forexfactory.com