Before jumping into the real estate market, you should have some idea of what you’re getting yourself into. Sometimes, there’s way too much supply (too many houses for sale) and not enough buyers—this is a “buyer’s market,” and that’s who has the upper hand in negotiations. Sometimes there are too many buyers and not enough supply—a “seller’s market.” Often, there are roughly balanced parts supply and buyers, which makes for a very healthy and predictable market.
There are currently way too many buyers who want to buy at any price and not nearly enough new homes being built, nor are there enough existing homes to meet demand. Generally, this would push prices up. However, since interest rates are increasing, some buyers are starting to get squeezed out of the market entirely, which should be pushing prices back down, but doesn’t seem to be.
Normally, the summer is the craziest time of the year for Realtors—no one wants to pull their kid out of school mid-year to move across the city. And although many Realtors are reporting that they have plenty of potential, well-qualified buyers are competing with other buyers over the shrinking supply of homes.
Depending on who you are and where you are in your life journey, the competitive market we have this year may be as good a time as any for you to buy—not to mention the generous amount of equity you would be building at the same time. Below is a brief breakdown of major buyer types and how the market could affect them if they were to buy today:
First time homebuyers. Jumping into the real estate market as a first timer is always a little terrifying, but the current market may give you a serious complex. If you’re buying a house to live in, not one that you expect will make you a bundle down the road, and your life is fairly settled, there’s no time like the present to go down the home purchase road. Just bear in mind that you will probably have to write several offers before you land that starter home—give yourself plenty of time for houses that will get away.
Maturing family. When you’re looking for that last house, the one you’re going to send your kids away to college from, the most important thing is finding a house that’s suitable for your family. There’s no time that’s better or worse for this purchase, especially if your plan is to hold it indefinitely. Sure, you may end up paying a little bit more now than you would have a couple of years ago, but the value you get from living in the house, as well as natural appreciation, generally ensure you come out a little bit ahead. It’s still a better alternative to renting.
Empty nester. Aging in place is the thing these days, and for good reason. That just creates one big problem: not enough inventory that will accommodate mobility equipment like walkers and wheelchairs that you may ultimately need. Although existing homes can work for your needs, new construction gives you the option to create an age in place friendly universal design from the foundation up.
Investor. You are literally the only group on this list that should be seriously concerned about the timing of your purchases. Since owner-occupied homes tend to be held for the long term, the risk to those buyers is minimal, but you’re looking to buy and almost immediately start making money.
Finding a good price on a listed home may be tricky right now, but switching gears to the building of new homes will introduce a lot of competition. Buying and holding properties as rentals could pay off, but only if you really buy them right. Now may not be a great time for you to buy if you have investments that are already paying for themselves. It would, however, be a pretty good time to unload properties that you’ve fully depreciated or those that just really don’t fit in with your portfolio.
When it comes down to it, the biggest factor you should be considering when purchasing real estate that you intend to occupy is whether or not you’re really ready for homeownership. A close second, of course, is whether or not you can really afford a house.
Let Urban Pro Homes be your guide! We’re your most reliable source when it comes to the question of timing your real estate purchase!
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