I was speaking with a friend yesterday who is pretty high up in the banking/finance world in New York.  He said, “I like your blog, but you have to stop talking about price as your primary focus, and start explaining to your clients the true cost of owning property over the long term.”

Here’s a good example of what he meant.

If you were to purchase a single family home in the Myrtle Beach real estate market right now, you might pay $180,000 for that house. And you might qualify for a rate of 6.75% (according to two lenders this morning). Your principal and interest payment would be $1,116 per month.

But what if you wait until things settle down, and you’re absolutely positive that the market has hit bottom?  Let’s say that you were able to purchase that same house for $170,000 six months from now, but changes in the mortgage market and inflation have pushed rates up half a percent (which, by the way, we fully expect to happen).

Now your principal and interest payment would be $1,112 per month.

Wow. Big savings, huh?

Plus… let’s not forget that in those six months, you’ve either (a) paid six more months of rent (money flushed away forever) or interest on your existing mortgage (mostly money flushed away forever), and (b) not living in the house you really wanted.

And, of course, in those six months you would have also built up approximately $900.00 in equity you still don’t have.

If you really want to buy real estate, stop worrying about price.  Go get pre-approved and lock in your rate now, while rates are still at historic lows.

You can thank me later.