Boston Condos for Sale 2021

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3 reasons why you should buy a Boston Beacon Hill condo NOW

It’s the age-old question everyone asks regarding Boston condos for sale, “Is it a good time to buy?” The resounding answer is YES

Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now makes sense. Others may be homeowners who are realizing that their current home no longer fits their changing needs.

To determine if they should buy now or wait another year, they both need to ask two simple questions:

Do I think home values will be higher a year from now?
Do I think mortgage rates will be higher a year from now?

Let’s shed some light on the answers to these questions.

Where will home prices be a year from now?

If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. Let’s take a house that’s valued today at $325,000 as an example.

If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.

Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.

Where will mortgage rates be a year from now?

Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:

The projections average out to 3.6% among these four forecasts, a jump up from where they are today.

What does it mean to you if home values and mortgage rates increase?

A buyer will pay a lot more in mortgage payments each month if both of these variables increase. Assuming a buyer purchases a $325,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,233.

That same home one year from now could be $350,025, and the mortgage rate could be 3.6% (based on the industry forecasts mentioned above). That monthly principal and interest payment, after putting down 10%, totals $1,432.

The difference in the monthly mortgage payment would be $199. That’s $2,388 more per year and $71,640 over the life of the loan.

Add to that the approximately $25,000 a house with a similar value would build in home equity this year as a result of home price appreciation, and the total net worth increase a purchaser could gain by buying this year is nearly $100,000. That’s a small fortune.

Here in Beacon Hill, more inventory is coming on the market which is evenly supported by supply and demand. For most of 2018 it has been a sellers market by all benchmarks and yet the pendulum is beginning to swing towards a buyers market. Here’s why.

Here are the reasons buyers should really consider buying a Beacon Hill condo right now.

Interest Rates

1. Interest rates are clearly continuing to rise and projected to rise three more times next year from economists predict.

Buyers can negotiate stronger

2. Buyers can negotiate a little stronger with sellers in this market slightly because of the seasonality in the market but also this shift right now changed the balance of power in the transaction.

Sellers open to contingencies

3. Beacon Hill condo Sellers might take a contingency sale in this market when they would not have a year ago.

Conclusion

The fundamentals in our economy are very good with an extremely low unemployment rate, high equity in home ownership, great bank balance sheets, strong GDP and CPI and an unpredictable stock market that tends to then benefit the Boston condo market.

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Boston Real Estate and the Bottom Line

When asking if they should buy a home, many potential buyers think of the non-financial benefits of owning a home. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

3 reasons why you should buy a Boston Beacon Hill condo NOW

Boston Condos for Sale 2021

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3 reasons why you should buy a Boston Beacon Hill condo NOW

Where will home prices be a year from now?

Where will mortgage rates be a year from now?

What does it mean to you if home values and mortgage rates increase?

Interest Rates

Buyers can negotiate stronger

Sellers open to contingencies

3. Beacon Hill condo Sellers might take a contingency sale in this market when they would not have a year ago.

Conclusion

The fundamentals in our economy are very good with an extremely low unemployment rate, high equity in home ownership, great bank balance sheets, strong GDP and CPI and an unpredictable stock market that tends to then benefit the Boston condo market.

Boston condos for sale

Boston condos for sale near Downtown/Midtown Boston

Condos around the Midtown area to rent:

Boston Real Estate and the Bottom Line

Boston Condos for Sale 2021

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