Ask a Real Estate Expert: Should Buyers Wait Out This Crazy Real Estate Market?

The most common question I am asked right now by would-be homebuyers is, “Is now really a good time to buy a home?”

The Real Estate Market in the past twenty years has seen housing inventory surpluses and deficits, interest rate fluctuations, mortgage loan requirement changes, and housing busts and booms. While there are many market factors involved in deciding whether to buy a home, my advice to clients remains constant: You should buy a house when you need one and are financially prepared to own one. If neither of those sounds like you? Then you should wait.

It’s really that simple.

Trying to time the market is incredibly challenging due to the many frequently changing factors affect buying — like housing inventory and affordability, interest rates and the lending environment, employment, and job growth. There are also micro factors in local markets that affect the viability of buying in any given part of the country — housing regulations, zoning, and local economic vibrancy, to name a few.

There is currently a nationwide shortage of houses available to meet the demand of buyers ready, willing, and able to buy homes. Most sellers are receiving an average of four offers or more for every listing.

So, the question of the moment is, “How long will it be before home prices level out?” And many would-be buyers are wondering if they should wait until prices decline before jumping in. So, what would it take for prices to fall? A tsunami of housing inventory would need to hit the market — enough to satisfy demand and then enough to create a surplus large enough to put downward pricing pressure on sellers. We’d have to build up a surplus inventory of well over 6–9 months’ supply before pricing would swing back in a buyer’s favor.

The other troubling prospect for buyers right now is the very real and looming fear that interest rates may begin to rise along with prices. Should this happen, folks who decided to wait out for lower prices may find themselves priced out of ownership altogether.  Even a rate increase of only 1% could be enough to erode your buying power and prevent you from qualifying for a home.

There are many factors involved in deciding whether NOW is a good time to buy a home. If you’ve begun to think it might be the right time for you, there are three important “next steps” you need to take. Choose a lender you trust. Work with a well-trained realtor who sincerely wants to help you buy the right home for YOU — not just sell you a property. And lastly, in the competitive market we are in, don’t get swept up in the urgency and make an offer that erodes your ability to thoroughly evaluate the home before you buy it.

The time to buy a home is when you need one and are financially prepared to do so. Trying to game or time the market may end up leaving you out in the cold altogether.

Considering buying a home?  Give Austin Freeman a call: 205.937.9825.  Search homes at: austinfreeman.soldbyarthouse.com