"...is now the right time to buy?"
This quarter's half full // half empty gives you my honest opinion on one of the questions I have received most frequently over the past few months - is now the right time to buy? While buying a home is a very personal endeavor, and the home buying landscape has been a tough one over the past few years, I'd love to share with you my honest thoughts on the subject.
To buy or not to buy - I am “half-full” on the former, if you were wondering.
I know, I know -- this may sound counter intuitive, especially when interest rates have doubled since the beginning of this year. And lest we not forget that over a week ago, Jamie Dimon, CEO of JPMorgan Chase, warned that a recession in the US is likely in the next 6 to 9 months. Yet, if all the reasons to buy a house (more space, less space, school districts, life transition) exist and you're feeling ready, I think it’s time to call yourself a BUYER.
Interest rates move - they are always moving - it's just that some days/months/years they move more dramatically than others. Historically low rates during the pandemic (likely not to be seen again) spurred a housing rush unlike anything many of us have ever seen. In our area alone, equity has drastically increased in less than two years! And yet, if you bought with those low rates, it was reflected in the high price of the property you purchased - which led to a higher tax basis, transfer tax and insurance.
So contrary to what the news would have you believe - now is actually a phenomenal time to buy, as long as the reasons to buy a house right now are present for you. Yes, that initial rate punch may be high (what goes up, may still go up - but will one day come down again) - but it is offset by the lower purchase price, tax basis, transfer taxes and homeowners insurance. Not to mention the competition has thinned considerably, and so have the days when a property received 10+ offers. And lastly, the recession. If it is true and a lower GDP, higher unemployment rate is on the horizon, so is a Fed announcement that they are lowering interest rates with the hope of spurring growth -- which will once again increase buyer demand.
The current consensus on the street is that inventory is not going to improve anytime soon, especially as we head into the traditionally softer time of the year. Now is when homeowners typically opt to focus on the holidays and family, instead of getting their house on the market. As we move through this holiday season and approach the time of year when inventory tends to be at its highest, it might be a great time to assess exactly what it is you are looking for in a house. Ultimately, if you have been feeling like it might be time to finally commit to buying, I feel that now is as good a time as any to take the first steps on your journey to find your next home.
If you're thinking about buying but have questions or concerns, feel free to reach out to me whenever you need to get honest answers on whatever your real estate needs may be.