The Case-Shiller index of home prices in the 20 largest metros reported January prices were up 8.1% over the previous year. That was the largest annual gain in over 6 years. In Park City, this number was up 12% within city limits, where the median price of a home hit $1,312,500.
Experts have projected that U.S. home prices will appreciate by 5.4% in 2013. If we assume that prices will rise about the same 5% over the next twelve months, here is the difference a buyer will pay if they wait a year.
$500,000 home would be $525,000.
$750,000 home would be $787,500.
$1,000,000 home would be $1,050,000.
As we all know, interest rates are still at all time lows. A 1% increase in the interest rate is equal to a 10% increase in purchase price, in terms of the effect on payments and purchase power. If interest rates AND prices rise, buyers could be looking at—
$500,000 home would effectively be $575,000.
750,000 home would effectively be $862,500.
$1,000,000 home would effectively be $1,150,000.
Doesn’t it seem like if you are thinking of trading up or down, now would be a good time to make your move?