The timing of buying a home is a question that every prospective homeowner faces. In today’s economy it seems everything from popular cryptocurrencies to major tech firms and corporations can easily plummet in value overnight. There is however, no reason to assume that real estate markets will follow this same volatility.
Homes Keep Their Value
Real estate in Montgomery and Howard County is a historically safe investment. In past recessions, area property values have slowed their increases, but they never lose value. In a ‘slow’ market, local listings may spend longer on MLS, but the value doesn’t decrease.
The Market is Still Active
National trends show there are still far more buyers than homes for sale, a condition experts expect to remain for the foreseeable future. While the bidding wars may have subsided for now, prices in the long term will continue to rise, and availability will continue to be limited. These conditions make homeownership a powerful wealth-building tool.
This is Not the Time To Wait
While increased home prices may seem like a logical reason to hold off purchasing, market history suggests otherwise. The cost to build a new home has greatly increased in part due to supply chain issues in the manufacturing and delivery of materials. Items such as cabinets, windows and appliances which were previously available in weeks, can easily take 6 to 12 months to arrive. Even as markets balance, prices for these non-commodity items traditionally do not decrease in price. Many of these increased costs are here to stay.
Interest Rates are Still Historically Low
Contrary to common perceptions, interest rates are still at historical lows. While average interest rates were as low as 3.25% a year ago, an average rate of 6% is incredibly low when compared to the past 50 years. An average interest rate in the 1980’s was typically around 17%. And this week, we are finding 4.99% interest rates for construction perm loan products.
Affordability relates to your monthly payments, not the purchase price of the home. With interest rates this low, buyers can spend freely on their new home without considerably affecting their mortgage payments.
Down Payments are Still Low
The upfront down payment is often one of the hurdles facing home buyers. However, construction perm lending options are still offering 5% down payments, and 10% no PMI (private mortgage insurance) down payments.
There is a truism that the best time to buy a home is ‘yesterday’. This is because the costs of land and construction are generally increasing. No matter the home prices or rates, the best time to buy a house is ‘as soon as possible,’ when you are financially ready.
Reach out to us online, or call our team at 301-256-4110 today to discuss your next steps, and what we can do for your family.
We are excited to announce that Classic Homes of Maryland is moving to the newly renovated state-of-the-art facilities at “Sixty-One Sixteen” in North Bethesda.
We are constantly working to improve our customer’s experience – This fantastic new space will consolidate our team and offer a variety of meeting places, including a shared indoor/outdoor terrace.
Come visit us at our new location starting December 20:
6116 Executive Blvd, Suite 750
N. Bethesda, MD 20852
The current increased desire for new homes has created a perfect storm of high demand and limited availability of materials in the construction industry, which has vendors and builders across the country struggling to keep up.
In a recent survey by Meyers Research, half of the builders surveyed had experienced delays in acquiring supplies. Outdoor deck materials such as pressure treated and composite woods are completely unavailable in some markets. Appliance vendors have also had difficulties, leading some builders to make substitutions and limit selections.
The National Association of Home Builders reports that lumber prices have increased by more than 170% since spring, adding an average of $16,000 to the cost of building a new home.
While we have managed to keep our projects on schedule through the summer, we are starting to see signs of potential supply interruptions. Our lead time for ordering windows has increased from four to twelve weeks, with siding increasing to three months.
These supply issues may cause disruptions for our customers, but by working together, we can do our best to mitigate or avoid delays entirely. After signing a construction agreement it will be vital that customers work with their Project Manager to complete the selection process quickly. This will enable us to order materials for your job well in advance, even before applying for your permits.
We hope these issues will be short term. The market is expected to level out in the coming months, with manufacturers increasing production and seasonal trends reducing demand.
If you have questions or concerns, please contact your Sales Manager or call us at 301-256-4110.
Classic Homes of Maryland is proud to support local media like Bethesda Magazine. The coronavirus outbreak has illustrated just how important local news is to keeping us informed and connected.
Due to the coronavirus pandemic, Bethesda Magazine is offering the digital edition of the May/June 2020 issue for free for a limited time. Don’t miss the feature on Classic Homes in the Builder & Architect Showcase on page 170.
The cover story, “Acts of Kindness”, details various examples of how “the worst of times has brought out the best in many local residents”.
We care deeply about our customers and employees. As always, health and safety are our primary concern. We are closely watching the situation with the spread of the novel Coronavirus and will be making changes in the interest of public safety and continued productivity.
The construction tour planned at the custom Avenel in Silver Spring on March 28 has been canceled. We will keep you updated if postponement of the Classic Homes Building Seminar in May becomes necessary.
We want to assure our customers that we are moving forward with due caution during these difficult times. While we will have to make adjustments to our processes, we expect overall interruption to be fairly minimal at this time. We have already begun making changes with our supply chain, and are prepared to make other changes as needed.
Strength of the Building Industry
Historically, the United States’ construction industry is overwhelmingly the one industry that has led our country out of tough economic times. This has held true through most economic downturn in the last 120 years. The building industry is well positioned currently, with interest rates historically low, and the demand for housing exceptionally strong and steady.
Meetings at Classic Homes Offices
If you have a meeting scheduled with our Sales or Orientation teams, please note that we are following CDC guidelines to clean our offices, and specifically our conference rooms and design facility several times daily and after each meeting. If you prefer, we are happy to offer phone conferencing or video conferencing.
We are temporarily changing our policy and limiting our meetings to our clients and their real estate professional or architect only. If you decide to bring any family member or children along , please call the sales manager in advance so we can make arrangements. We all have families, and are aware of how difficult it is to have children and other relatives stay home.
Working together, we will keep your dreams and goals moving forward. You can call us at 301-256-4110 (sales) and 301-251-2001 (main) with any questions. Thank you for your understanding, and your patience during this time.