In May of 2008, interest rates for a 30-year fixed rate mortgage were hovering between 6 and 6.5 percent. Today they are averaging about 4.5 percent.
If you were going to finance a $150,000 home today, the difference in interest rates would save you approximately $2,250 to $3,000 a year.
Alternatively, this would be a monthly savings of $187 to $250 a month.
Another factor would be the difference in price.
The average selling price for a home in Payson in 2008 was $313,028. Last quarter’s average selling price was $212,423.
Doing a little math tells us that the average selling price has declined in two years by about 33 percent. This number does not necessarily reflect the drop in individual home values because fewer homes in the higher end are being sold, but it may tell us that this is the time to buy.
Insurance companies are, albeit indirectly, telling us it is time to buy.
Have you checked the replacement cost value on your home as indicated by your insurance policy? Looking at some homeowner’s insurance policies vs. recent sales, the policy’s replacement cost is at two times the selling price of the home. And the selling price includes the land, where as the insurance policy only covers the value of the home.
Insurance companies are saying homes are undervalued by as much as 50 percent.
Buyers looking at our market should look at the above statistics, but also the other things that are changing in the Rim Country.
The area’s stigmatization over adequate water should dramatically change.
The Blue Ridge project will ensure Payson has adequate water.
Pine-Strawberry, which also has been the brunt of questions regarding water supply, has all but solved its water adequacy issues with the discovery and utilization of deep aquifer water wells.
The potential of a major university should and is starting to attract the eyes of investors and has the potential to drive housing prices higher.
Based on all this, now is the time to buy.
Ray Pugel is a designated broker with Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.