John and Natasha Karadsheh
With prices increasing, multiple offers the norm, and limited housing inventory, potential buyers are wondering if now is the right time to buy. It is true that values are high, although today’s historically low interest rates are creating a unique market opportunity.
While some buyers may think it is better to wait until there is a price correction, there is no way to know when or if that will occur in the coming years. After a brief dip during the Arizona stay-at-home orders, the COVID crisis has only fueled the housing market both locally and nationally.
A year ago, we had buyers who waited to buy because they thought that prices would drop. Now they have been completely priced out of the market and are stuck in a rental.
Furthermore, the influx of people moving to Arizona from other states remains significant. Our Valley growth does not look to be slowing anytime soon and we are still not building enough new housing to meet demand.
If rates increase — which will inevitably occur — your payment will still be higher even if values decline. Take a look at the chart shown.
| Purchase Price | Loan Amount
(20% Downpayment) |
Interest Rate | Monthly Payment (P/I Only) | |
| Today’s Value | $625,000 | $500,000 | 3.00% | $2,108 |
| 5% Less | $593,750 | $475,000 | 4.00% | $2,268 |
| 10% Less | $562,500 | $450,000 | 5.00% | $2,416 |
| Today’s Value | $400,000 | $320,000 | 3.00% | $1,349 |
| 5% Less | $380,000 | $304,000 | 4.00% | $1,451 |
| 10% Less | $360,000 | $288,000 | 5.00% | $1,546 |
If you don’t have 20 percent down, there are still many opportunities to purchase a home. At the time this was written, down payment assistance was still available along with low down payment FHA programs, and other creative ways to help first time homebuyers achieve their dream of homeownership.
If liquidity tightens, as it did in March, those creative programs will go away. If you are a parent with some resources to help your child buy a home, now is the time to offer that support. Sometimes as little as $5,000 can make the difference in whether they can afford to buy or not.
Now more than ever, people want to get out of rentals and have the security of a home they own. With interest rates this low, owning is actually more affordable as well.
Our homes are no longer the places we live, but also the places we work, go to school, find entertainment, and vacation. As long as you are looking at your real estate purchase as a long-term investment and you can afford your monthly payments, now really is the optimal time to purchase a home.
John and Natascha Karadsheh are co-owners of KOR Properties, a boutique real estate brokerage serving the Valley of the Sun and the creators and founding sponsors of Mesa Food Truck Fridays.
John has been a Multi-Million Dollar producing agent for over 17 years, and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS), and is the Chairman on the Arizona Regional MLS Rules and Policies Committee.
Natascha is an Associate Broker of KOR Properties, a Multi-Million Dollar Producer, Past-Chair of the City of Mesa Economic Development Advisory Board, and the founder of the Falcon Business Alliance.
You can reach John at (602) 615-0843 and Natascha at (602) 909-4995, or visit their website: KORProperties.com.