September 1, 2010 Update:  So what is happening in Eagle River Real Estate Sales?  Last month, 39 single family homes and 6 condo’s were under new ownership in Eagle River.  In August a year ago, 48 single family homes and 4 condo’s changed hands.  So, sales have slowed some—just like in the rest of our Country.  Where we differ is that prices in the rest of the country are still declining a bit and ours are mostly stable.  (The average sales price in Eagle River actually increased about 3% in July.) 

So, is it a good time to buy?  My answer would be an emphatic, yes!  My response is heavily weighted by mortgage interest trends. 

Just in case you haven’t been following them, today’s 30-year conventional mortgage rate was at 4.25%.  The VA and FHA rates were the same, 4.25%.  We haven’t seen rates this low in 40 years.  Why, your parents probably can’t recall when rates were this low!  So, why are folks waiting to buy?  Hoping for a decrease in prices?  Is that logic sound?  Let me provide an example from which you can draw your own conclusions.

Let’s say you bought a $325,000 dollar home, the average for Eagle River.  And for the purpose of illustration, you got a $300,000 loan.  If prices went down, and the house dropped 10% next year, you would lose $32,500.  If you got a loan for that same home, today, your principle and interest payment would be $1,476.  If interest rates go up next year to 6% (We cannot really predict where interest rates will be next year, but 6 % is a reasonable possibility) then your payment would be $1,799.  The payment difference is $323 each month.  That’s as much as a car payment!  Over 30 years that difference is $116,280!  Can you afford that?  Wouldn’t it be better to be putting that into your retirement fund? 

If that makes you feel like it is time to buy or sell a home in Alaska, I am available to assist you in exploring the possibilities.  Or, for more information on homes for sale in Eagle River, Alaska, click here.