A Seller’s Market Shouldn’t Scare Buyers Away
It’s a seller’s market in much of the country, which means competition is fierce, and prices are likely to be on the rise. Yet, these factors don’t necessarily make it a bad time to be a buyer.
A natural reaction to the current real estate trends might be to sit on the sidelines for another year or two and hope for a better deal down the road. However, that strategy could end up being a bigger gamble than you might realize.
First-time homebuyers, in particular, could be better off exiting the rental market. As the economic protections related to COVID relief expire, many landlords are raising rents. Investors are also buying properties to rent, taking more homes out of the sales market in the future.
So, while prices are rising, it’s more reflective of the reality of the market rather than any artificial factors. While the uptick may level off, most experts believe that values will continue to climb. Unlike when the housing bubble burst in 2007, lending regulations enacted in the last decade have limited the risky loan practices that led to that crash. If the fear of overpaying is the only thing holding back your house hunt, you might find yourself paying even more in the coming years.
Historically-low interest rates are another reason why now might be the best time to buy. If your credit is in good shape, you’ll be hard-pressed to get a mortgage at a lower cost than you can now. Even if the competition slows enough to lead you to a better purchase price in the future, there’s no guarantee that higher interest rates won’t offset any potential savings.
In a worst-case scenario, you could face higher home prices and higher interest rates. Rather than trying to perfect your long-term investment, consider prioritizing needs over the numbers. Let your circumstances determine your best path to homeownership. Putting the market in charge could mean the timing is never right.
Good TimingFortunately, a seller’s market won’t eliminate your ability to look for the best deal possible. So as peak real estate season comes to an end, you may enjoy a little less competition than your spring and summer counterparts.
While you shouldn’t expect a lowball offer to be accepted, you might avoid a bidding war that could drive the list price even higher. A good compromise for cost-conscious buyers is to do their home shopping in the slower fall and winter seasons. If you’re considering waiting out a seller’s market, it might make more sense to wait out peak season and start your search this fall.
Navigate a competitive real estate market with a lender you can count on. Visit OpenMortgage.com for resources to guide your search, or call now to speak with an experienced loan officer.