By Jaime Silveira
Owner/Broker Malik Real Estate Group
Should I wait to buy a home?
This is a constant question I’m asked on almost a daily basis. How do we time the real estate market just right when we want to buy low and sell high? This is a loaded question and can be easily second guessed. For those that are involved in real estate, great for you! If you own a home, you are involved in real estate, whether you follow the market or not. If you are looking to purchase a home, you are involved in the real estate market and are most likely following it very closely.
Over the years, we have seen very well-known individuals make comments about the real estate market. Here are just a few:
- “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt.
- “Buy land, they’re not making it anymore.” – Mark Twain, writer.
- “I still think buying a home is the best investment any individual can make.” – John Paulson, billionaire.
- “It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.” – Anthony Trollope, novelist.
- “Now, one thing I tell everyone is to learn about real estate. Repeat after me: real estate provides the highest returns, the greatest values, and the least risk.” – Armstrong Williams, entrepreneur.
The market has continued to move forward, month after month through 2023. Atascadero currently has an average days on the market of 8. We are seeing buyer demand and interest in the market continue to grow. In the month of June 2023, Atascadero closed 23 residential homes. At any given time, Atascadero has approximately 32 residential homes available to purchase.
As you can see, the ratio between closed homes and active ones is very close. Closer the last couple of years, compared to pre-COVID times. With the number of closed homes comparable to the number of homes available, the real estate market continues to be positive for both buyers and sellers in different ways.
If you are a buyer trying to time the market, understand that right now, buyer competition has slowed slightly but will likely increase as interest rates drop, whenever that may be. Traditionally, buyer demand will follow interest rates. The lower the interest rates, the higher the buyer demand, while the higher the interest rates, the lower the buyer demand. Lower interest rates will drive buyer demand up because buyers are able to afford “more house,” so they feel their money can go further. Buyers will want to take advantage of the market while interest rates are down, which is exactly what we saw from mid-2020 through mid-2022.
Buyers entering the market will always face a certain amount of uncertainty. They wonder if they chose the right property to purchase. Will their offer be accepted? Buyers wanting to purchase a home have to compete against other buyers that are just as eager as them to purchase a home. Not only do buyers need to worry about the purchase price they want to offer on a home but the conditions as well. Will the offer be contingent on the sale of an existing home? Do they need a loan to purchase a home? Or do the buyers have the ultimate power of being able to offer a cash deal? You’ve heard the phrase “cash is king.” Well, that absolutely rings true in real estate. However, most buyers are not in the lucky situation of being able to offer all cash.
Buyers entering the real estate market, as well as those with equity earned on an existing home sale, can best prepare themselves by locating a mortgage lender and getting pre-approved. That way, they know what they can afford, and it helps to set realistic expectations about the type of property they should be looking at. This also helps the buyer’s real estate agent so they can narrow down the types of properties they should be previewing for their clients.
Ultimately, once the math and financials are penciled out, only the buyers themselves can answer the question of whether or not it’s the right time to buy. Each buyer has their own very personal situation, tangible and intangible, to consider to figure out whether or not now is the right time for them to buy a home.
Real estate is not a cookie-cutter industry. No one situation will predict the next, but your Realtor has likely seen most and will be able to guide you through what could be a daunting process. Allow these professionals to see you through the process of arriving at your destination, Home Sweet Home!
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