When is a good time to buy?
Numerous factors go into the fluctuations of the housing market. Seasonality, job availability, construction starts, the stock market and economy, local and national politics, mortgage rates and more. All of these affect our housing prices. Many news reports say that this is still a hot market, so should you wait for it to calm down to buy? Can you time the market? That’s a great question and one that I’d like to explore.
Having studied Economics, I learned early on that you can’t time the stock market and I believe the real estate market presents similar challenges. Before we get into details of how to navigate the market, let me just emphasize this point - for a primary residence, buying beats renting in almost every case. As long as you are looking at your home purchase as a long-term (5 to 7+ years) investment, buying is better than renting. There are always edge cases with every scenario, but I can’t tell you the number of people I’ve known through the years who have decided to time the market and they wind up sitting on the sidelines only to buy something years later in a less desirable neighborhood or they move out of the area altogether. In the meantime, they’ve paid someone else’s mortgage while living in a rental. These are smart people, but they get paralyzed by indecision and wind up watching the market go by.
Buy with the future in mind.
The answer isn’t just to jump into the market headfirst, you have to be strategic and buy your property with the future in mind. So how do I guide buyers in this accelerating market? By focusing on the right components of the home. The recipe of home valuation has many ingredients, square footage, lot size, schools, level of home repairs needed, walkability to shops and restaurants, floor plan or “bones”, traffic level on the street, lack of noise from freeways or trains, proximity to job centers, length of commute, fit and finish of interior, landscaping, HOA cost and financial health, the list goes on. Not all of these elements have to be perfect for a good purchase, but the more of them the property has, the more future proofed it will be. So if you’re looking to buy something now, it’s still a great time, just make sure to look for as many of these ingredients as possible.
Some ingredients are more important than others, so if you want to talk about timing the real estate market in more detail, please don’t hesitate to reach out.
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Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.