If there’s one thing you need to know about buying a home this fall, it’s that many experts believe you should start now—seriously. Kate Koplinka, a Wading River-based Licensed Broker Associate at Coldwell Banker M&D Good Life and PR Chair for the Long Island Board of Realtors is among those who believe buyers should act quickly. “In the past, buyers have waited around for the perfect house,” she said. “Instead of waiting for the perfect house, it’s more important to wait for the perfect market. This is it.” Perfect is a strong word, but the numbers do indicate a market that favors buyers, if only for the moment.
While we’re currently experiencing historically low interest rates and stable, affordable home prices across the Island, that’s not likely to last.
Median sale prices of homes across Nassau, Suffolk and Queens counties have leapt seven percent in the last year, going from $355,000 in June of 2012 to $380,000 in June of 2013*. Interest rates are also on the rise, increasing the overall cost for buyers.
“Inventory is still very low but it is the best time to get into the market because…the mortgage rates are creeping up very slightly,” said Maggie Keats, a Port Washington-based associate real estate broker with Douglas Elliman.
The increase in interest rates can make a big difference for potential buyers, who may find they can no longer afford a home this year though they may have been able to last year. “Here’s a simple example to illustrate it,” Koplinka said. “If you purchased a home last year at $200,000 with a 3.5 percent interest rate, your principal payment would be around $898. This year, if you purchased a $220,000 house with a 4.5 percent interest rate, the principal would be $1,119.71. That’s a $216 difference. That’s a car payment for some people.”
And those rates are only predicted to go up. Now it’s not a question of if, but when. “I think everybody has their eye towards the end of the year for interest rates to go up more precipitously,” said Keats. “Going into next year, I think the market [will have] definitely stabilized and I think we’re just going to see a more normal market cycle.”
Koplinka agreed that the coming surge made now a good time to buy. “Prices are on the rise and appreciation will be greater on a house you are moving into than the house you’re in now.” It seems these days, in terms of the real estate market, fortune indeed favors the buyer.
*Source: Long Island Housing Data for June 2013 Multiple Listing Service Long Island.