While no one really knows what will happen with prices, most housing experts predict that prices will remain soft for at least 18 months and not hit today’s prices again until the 2nd quarter of 2012. In fact, most are calling for an additional 5-8% decline before appreciating again.
So what does this mean for sellers? Basically, if they get an offer – even if it is lower than they want – they need to seriously think about accepting it as prices will continue to soften.
If you’re a buyer, you need to look at cost verses price. While the prices of homes may be declining, the cost to purchase them is actually increasing as mortgage rates climb.
Below is a table showing the impact rising rates have on the monthly payment – even if prices continue to soften: