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Dean Badessa's Blog
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I'm often asked if this is a good time to buy a home in San Francisco. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!
Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. 30 Year Fixed Rate Mortgages are at historic lows since Freddie Mac began recording interest rates in 1971. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!
While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.
Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.