Home Buying Tips Charleston SC: Buying A Home Makes
If you are thinking about buying a home in Charleston SC, then here are some good home buying tips. Charleston SC is a hot real estate market and offers plenty of reasons that buying a home makes sense. Here are just a few of them:
1) A Home Is A Leveraged Investment
Your home itself allows you to use “other people’s money” to purchase it simply by the fact that you only have to come up with at least 3.5% of your own money as a down payment to purchase. The bank provides the rest.
Your home will appreciate over time, creating what is known as equity. Equity helps you build wealth (more on that later).
For example, you can purchase a $200,000 home with $10,000 (that would be a 5% down payment, common to Conventional Loans). If that home appreciates by 5% the first year, then at the end of the year it would now be worth $210,000.
So, you now have an investment worth $210,000 and you only spent $10,000.
2) Home Ownership Has Many Advantages Over Renting
After a couple of years renting, you have nothing to show for what you spent. If you owned a home, you would have built equity and wealth.
The infographic below clearly shows the wealth advantage of home ownership. Take a look at what the net worth of the average American family is, home owners vs. renters.
3) Ownership Is Forced Savings
We all know we should be saving money for an emergency fund, investing, retirement, kid’s college, etc. However, that doesn’t always work out. By paying your mortgage and building equity, you are in essence saving up money. Money that you can tap into later if you needed to.
4) Tax Benefits
You get a tax deduction for owning a home.
You can also deduct mortgage interest and
property taxes from your income as well
5) Protection Against Inflation
The cost of housing and rents go up over time, and more often they tend to rise faster that inflation. But home ownership means your monthly housing payment will stay the same.
6) Interest Rates Are Near Their All Time Lows
This is a look at the average interest rate for each decade since the 70’s and also shows what a typical house payment would be at each rate.
As you can see, right now you have more buying power now than at any other time in history. However, interest rates won’t stay this low for long.
Top analysts project rates to be higher in 2015, by as much as a full point.
Plus, home values continue to rise. So, a $200,000 house will not still be $200,000 this time next year, and interest rates will also be higher.
This means you will not be able to buy as much house next year for the same amount of money.
7) Inventory Is Catching Up To Demand
For most of 2014, there simply wasn’t enough houses to meet demand. That is starting to change. In a normal real estate market there is a 6 month inventory of homes. If there is more than 6 months supply, then that is considered a buyers market. If it is less, that is considered a sellers market.
It is not uncommon for a house to receive multiple offers, which drives the price higher. This can be a tough situation for buyers. If you see a house you really like, then you have to move on it quickly, or lose it to another buyer.
Right now, on a national level, we are seeing the Months Supply of inventory at 5.5 months.
In the greater Charleston SC area, it is down to 5 months. So, the sellers still have a slight advantage.
It is important to remember that you don’t want to try and time the market–wait for the perfect scenario to buy. You won’t know when the interest rates are at their lowest until it has already happened and you are looking back in hindsight.
Home Buying Tips Charleston SC: Don’t Wait For The Market To Be “Perfect”
You also don’t want to wait until the market turns into a buyers market–with the way sales are going and demand is still strong, it could be another year or even years before that happens. Especially in Charleston SC. As you can see by the graph above, months supply has dropped sharply over the last year and a half. Sellers are gaining leverage.
Charleston is a destination town, and more and more people are moving here every day. Another thing you miss out on by waiting is the chance to build equity. Instead, you will throw more money away paying someone else’s mortgage.
If you are thinking of buying a home in Charleston SC, then be sure to visit my website. You can get a custom list of homes for sale that match your exact criteria, and you can also check out some more helpful articles and videos with more home buying tips Charleston SC.
And, for some more helpful home buying tips Charleston SC, simply fill out the form below and I will send you my Fall 2014 Home Buyer’s Guide free!
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