- February 1, 2023
Is This You Too?
“Many of us think the high-priced, housing market of 2022 was going to settle down,” a New York couple says.
A New York real estate agent offered six figures above the asking price to a couple in a bidding war market. In the volatile market, they worried about overspending on a home for their two young children.
They thought everything was overpriced and that they were following the market. “We’ll wait for the market to dip,” they said, believing it would be brief. We’ll return and find home.”
Markets didn’t fall. Instead, neighborhood prices are 25% higher than when the couple delayed buying a home because they thought property values would rise. As prices rose, they bought the house they were renting.
Their story did not have a happy ending.
In the volatile housing market of recent years, many buyers may try to “time the market” to avoid overpaying for a home.
Some buyers postpone their purchase because they expect prices or mortgage rates to fall.
Agents also tell stories of buyers who buy a subpar home because they think prices or mortgage rates will rise.
Experts advise against using either
Trying to time the market is a bad idea since no one can predict the future perfectly. Whether you think rates and prices are going up or down, the world might not alter like you think it will. We’re all obliged to make decisions when faced with uncertainty.
Why the fear of overpaying can paralyze homebuyers
Market conditions will always influence consumer choices. Mortgage rates have spiked and prices have risen over the past five years. Some buyers lost their mortgage because they couldn’t make the monthly payment.
Buyers with no funds should end their property search. Homebuyers who are only worried about overpaying in a competitive market despite being financially stable may regret their decision to stay away.
Buyers are “waiting but watching.” A young professional bets that prices will fall further from their mid-2022 peak.
Even though rising interest rates have priced them out of the market, some potential homeowners believe the market will crash and prices will fall.
Potential homeowners worry about overpaying, surveys show. Since housing costs are still near all-time highs, this worry may be excessive.
Even though home prices are expected to fall this year, high mortgage rates may keep housing costs high. Homebuyers should understand this immediately. Expect a deal in 2023.
A slowdown in home price growth wouldn’t make 2023 a buyer’s market. Buyers and sellers with unrealistic expectations may stall the housing market next year. 2023 may be a “nobody’s market” for homebuyers and sellers.
What then is the ideal time to purchase a home?
In today’s culture of searching for the greatest deal, wanting to wait for a better offer seems to sense. This “buy low, sell high” approach may work well for luxuries like flat-screen TVs or stocks, but it does not work well for real estate deals. Why? Because daily factors like convenience to work are frequently taken into account when buying or selling a home. Is there space for your family there? —not the status of the market today.
Instead of obsessing over the market, focus on your unique living situation.
If you are willing to stay in one place for five to seven years, finding a home that meets your needs, fits your budget, and you can live in for the foreseeable future is the best way to succeed.
If you have a preferred agent to work with, let us know and we will forward your information to them. If not, we will happily introduce you to one of our qualified agents to assist you in the buying or selling process.
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