I received this question from one of my clients moving to Fayetteville NC in the near future… It is a valid question and I would like to share my answer with you!
I forgot to ask. Do you also deal with rentals? We have a friend here who is in real estate and says now is still not the time to buy unless you are planning to be in the home over 10 years. We are also a little apprehensive about a down payment should we decide to buy.
I can appreciate your friends advice, but each market is very different. I am not going to convince you to either or I will only give you the facts to help make your decision.
Historically in the Fayetteville area the AVERAGE increase in property values is three percent per year. Now I say average because the area that you purchase in can make all the difference. There are some areas that have gained in value even in this economy much greater than the average and some areas have not gained in value at all. While a lot of the markets around the country had housing “booms” where prices were literally going up each week to all time highs that did not happen here in Fayetteville. At that time builders did a lot of gripping because they thought that because we are mainly a military town with a lot of VA loans they felt with the guidelines of VA that they were keeping the prices down. I never believed that to be true, but the point is when prices then bottomed out Fayetteville didn’t have far to fall. Where in some markets people were losing 50,000 to 200,000 on home values we lost maybe 5,000 to 15,000. We have a very stable market because of the military, people are always coming and always going. The great thing for the people in our market are getting to buy more for their money! With interest rates at an all time low and house prices being as low as they are now it is a great time to buy. As far as how long on average should you own a home before you are able to sell and break even (no money out of pocket to sell) is about three to four years. Again being the AVERAGE because one side of town can do better than another.
Renting can be beneficial if you are not sure how long you will be able to keep the family here. If you think it could possibly be less than two years than it is most likely better to rent. But finding a rental that allows pets could be a issue for your four legged family members. But if you decide to rent we will look at all the options to get you to a place that will fit ALL of the family!
Down payment issue… I am assuming that you will be using your VA entitlement to secure your loan. The best way to purchase a home today. You still must speak with a loan officer, I have many that I can suggest, because the bank is going to be loaning you the money VA is going to be backing the loan. What does that mean for you? NO money down, VA is 100% financing and no Principal Mortgage insurance like you would have to pay on a conventional loan if you did not put 20% down.
I hope that I answered all of your questions and I hope this helps ease your mind. Of course no one can predict the future we can only give you our best educated guess on how things are going to go because how things have been. Buying a home is a big decision and I don’t want you to think that you can not ask me ANYTHING about the process I am here to help you through. Thanks for trusting me with the needs of your family. Melissa