Home values in San Jose, Morgan Hill, Gilroy, Hollister and San Juan Bautista “have landed” at the bottom of their value slide and are beginning to “lift off” that bottom. We are not going to see these prices again for a very, very long time, if ever again.
Here’s the affect of waiting to buy a home: A home listed today for $350,000 and goes up 5.0% in value will then be worth $367,500. A buyer who waited and then buys this home will need $985 MORE CASH and $268/mth MORE INCOME to qualify for this same home.
If the interest rate is at 6.0% (vs. the 5.0% used above) when the buyer decides to purchase this increased-value-home, their income will need to be $843/mth. HIGHER to qualify!
Some prospective home buyers may be calling out: “Houston, we’ve got a problem“. The erosion of their purchasing power may make them permanent renters.
My crystal ball recommends that those who want to buy a home climb on board NOW while they can. What does yours forcast?