Looking for a cheap house to buy in Metro Phoenix? Better get one while you can...
There are thousands of homes to buy, but the days of $50K, $60K, or $75K homes are all but gone. In fact, as the Metro Phoenix real estate continues the path to full recovery, listing counts are declining for all segments under$175K. Why? Values are increasing. There's aren't many really inexpensive homes left. Look at the chart put out by the Cromford Report on 10/2/16. As it is, our median home price for the metro area (all areas, all types of homes) has hovered at the $230K mark for the last 3 months. That median price was $142K in 2012 and bottomed at $108,100 in the middle of 2011. We've come a long way...
Interest rates are still really low- lower than they were at the peak of the housing crisis.
Interest rates right around that time in 2011 for a conventional loan with 20% down were 4.125% and about 4.75% on an FHA loan with 3.5% down. Today, that interest rate for same loan amount roughly 3.5% for conventional and about 4.125% for FHA. What does that look like on paper?
In summer of 2011, a buyer buying a home at the median sale price would have paid between $418-544 for a mortgage (depending on their credit and down payment amount).
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A mere 5 years later, in summer of 2016, a buyer buying a home at the median home price would have paid almost double- between $826-1,075 for a mortgage (depending on their credit and down payment amount), even with lower interest rates.
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In case you're wondering about the house...
The average size home went from 1,944SF in 2011 to 2,000 in 2016. That equates to a 56SF space- maybe a 5x10 closet or nook?
The bottom line...
If you want to own a home someday, you have to start by getting your foot in the door. Interest rates help, but rising home prices are harder to combat. And for all the naysayers who keep talking about "the bubble on the horizon". Keep dreaming! I'll address that in another post someday, but the fundamentals are pretty solid.
All this said, if you really want to be a homeowner and quit paying someone else's mortgage, have a stable place to live where your monthly payment won't have wild increases, be able to paint your walls without asking permission (well, at least on the inside) and start building a nest egg, you have to figure out what you can comfortably afford and find a way to make a down payment. There are lots of ways to do it, no matter how difficult, impossible, no chance in "you know where" it seems. Where there's a will, there's a way... I can help. All you need to do is call, text or email me to get started. ;)