Here’s why you shouldn’t wait for the market to crash before buying.
Recently, friends and clients have told me they’re waiting for the market to calm down before buying. After all, everyone knows it’s a crazy seller’s market. Why look for a home when there’s so much competition? I’m here to tell you why waiting for prices to drop is probably a bad idea.
The first thing to mention is that no one has a crystal ball. Every real estate prediction is wrong; it’s just a matter of how wrong yours will be. That being said, most market leaders and financial experts agree that our hot market isn’t going anywhere.
The conditions of this market are very different from the last crash in 2008. High demand didn’t cause the crash. Instead, junk mortgages were sold to people who couldn’t afford them. When the bottom fell out, the economy was left holding the bag. Nothing like that is driving this market, so there is no reason to expect a similar result.
No matter how much money you spend on a home, it will be worth more tomorrow.
For example, if every home in forbearance across the country hit the market today, we’d still only have four months of inventory. For reference, six months of inventory is considered a balanced market. Our low inventory is actually fallout from the 2008 crash. Builders have been cautious about building new homes since then, and we’re feeling the impact today. When you combine the low inventory with all the money being pumped into the economy to help with COVID, it doesn’t look like home prices will fall anytime soon.
For the sake of argument, let’s say they do drop. Do you want to buy a home that’s losing value? Home prices have been increasing at such a steady pace that it’s pretty much always a good investment to buy. No matter how much you spend, the home will be worth more tomorrow. On top of that, we have historically low interest rates. Unlike rising home prices, low interest rates could be going away soon to deal with inflation, so take advantage of them while you can.
If you want to buy a home and start accumulating equity, reach out to me via phone or email. I’d love to help you find your dream home.