A Madison Buyer’s Real Estate Update

I recently put up a post about whether it was better to rent or buy here in Madison.  The Freddie Mac site I had recommended targeted both personal and financial reasons to consider one option over the other.  As a follow-up, I want to share a mortgage calculator that compares the financial impact of renting versus buying.  I found some interesting information when using the calculator with average Madison costs.  Assuming you were renting an average priced 2 bedroom apartment in Madison (data provided by ApartmentRatings.com), you would be spending $825/month.  After inputting the monthly expenditure of $825, the current average 30 year fixed interest rate of 6.1%, and a $5000 down payment, the calculator estimates that one would have the following after 30 years.

If you were spending $825/month on a mortgage:

You would own a $396,150.27 house

You would have saved $45,040.86 in income taxes on interest payments of $160,860.21.

If had rented a property for the $845:

Instead your $5000 down payment would have grown into $57,791.26

This calculator, which takes into consideration long term inflation, investment return, and tax rates, shows that Madison home ownership makes great sense. Trulia is reporting that the average sale price for a 2 bedroom property in Madison is only $165,000 with many Madison area properties on the market for much lower.  With higher inventories and great negotiating power in Madison, now is the perfect time for buyers to step into the real estate market.  If you are considering Madison home ownership and have questions about the market or how to proceed, please feel free to contact me.

Ready for WI Homeownership?

There is no doubt that we have entered a buyer’s market here in the Madison area.  This market, although great for all buyers, is especially great for the first time Madison area home buyer.  With plenty of mortgage options available and still amazingly low 30 year fixed rates available, people with adequate credit and stable income have enormous buying power in this Madison market.  Despite the fact that buying property in Madison continues to prove as a solid investment, buying a home is a huge decision and it is important that each person ensure that it is right for them.  I found some great tips on the Freddie Mac site that I thought potential first time home buyers may find helpful.  It lists some of the great pros to home ownership, like having your OWN place and the potential for fixed monthly payments for the next 30 years, as well as some risks of homeownership that you may not have considered.  I would urge everyone to take a look at this site and then let me know if you are interested in making a real estate purchase here in the Madison area.