Home prices in metro Atlanta have decreased during the past couple of years but the decrease is not nearly as severe as in some other parts of the country. Atlanta prices have never fluctuated wildly and consequently are not likely to do so in the future.
 
Assume a property is selling for $220,000 today. If you purchase it today with a 30-year, fixed rate 80/20 mortgage, your down payment is $44,000 and your monthly payments on the $176,000 mortgage are $1009.15 at the current (approximate) interest rate of 5.5%.  For the sake of illustration, let’s assume a worst case scenario:  Assume that same house depreciates 10% in value over the next year. That means it would sell for $198,000 ($220,000 minus $22,000).
 
While no one knows for sure what is going to happen to mortgage rates in the future, the general consensus is they will increase. Again for the sake of illustration, let’s assume they will increase from the current 5.5% to 6.5% one year from now. If you still want to buy that house with a 30-year, fixed rate 80/20 mortgage, your down payment would be $39,600, your loan amount would be $158,400 and your monthly payment with a 6.5% mortgage rate would be $1010.82…almost exactly the same as your monthly payment for that house today. (Of course, your required down payment will be $4400 less, but your monthly payment will be essentially the same – and the annual tax savings you will get during the year will offset most of that amount.)
 
Nobody can guarantee anything about future home prices or mortgages rates. However, most professionals in the business today would agree that the chances of mortgage rates going up at least a point in the next twelve months are greater than the chances home prices in Atlanta declining by as much as 10%. That means buying a home today – instead of waiting for prices to start going up – is the smarter option.
 
Three final reasons:  FHA loans may be available up with as little as 3.5% down. If you are a first-time homeowner (have not owned a home in the last three years) you are entitled to a federal tax credit up to $8,000 if you purchase and close by December 1, 2009.  There may also be additional tax credits if you buy a qualifying bank-owned home. I can provide additional details of these programs if you like.
 
Please let me know if you know of anyone in Atlanta who may be waiting for a better time to buy. The time is now.  
 
Burt Cloud
Associate Broker
Coldwell Banker Residential Brokerage
404-626-3114