Published October 21, 2023
Is NOW a Bad Time to Buy Real Estate?
Is now a bad time to buy real estate?
The current climate of 8% rates and tight inventory feels like the exact time to ask this question. But truthfully, folks were asking the same question two years ago when rates were sub-3% and bidding wars defined the market. Now that almost seems silly, right? But there is always some degree of uncertainty. Of course rates were great in 2020-2021, but going $50k-$100k over asking price would give anyone pause. And in 2020 - who could have predicted one of the best times to buy a home was during a global pandemic?
Each market has opportunities - they are just different. I personally just bought another house - despite rates. Why? Because it was the right property and right time for me. There are many questions that we need to answer to determine when the right time to buy might be for you, but it's important not to be scared off by rates.
If life events have prompted you to think about buying a home in the near future, here are 3 reasons you’re not crazy:
LESS COMPETITION
It was just a short 18-24 months ago that homes were going 10-30% over asking price (aka $800,000 list price -> $960,000 sale price ). We currently have a reprieve from bidding wars and paying prices over-asking. And as soon as rates drop again, all of the folks who have been sitting on the sidelines will jump back in and competition will be BACK.
BETTER NEGOTIATION LEVERAGE
We are finally in a position as Buyers to be able to negotiate! We can ask for things - repairs, closing costs, etc and reasonably expect to get them. We see this go away during times of intense competition. Also, if you have a home you need to sell to move, contingent offers are actually being accepted - yahoo! It’s a much more pleasant experience overall to be a buyer in this market than in the boom times of 2020 - mid 2022.
Each market has opportunities - they are just different. I personally just bought another house - despite rates. Why? Because it was the right property and right time for me. There are many questions that we need to answer to determine when the right time to buy might be for you, but it's important not to be scared off by rates.
If life events have prompted you to think about buying a home in the near future, here are 3 reasons you’re not crazy:
LESS COMPETITION
It was just a short 18-24 months ago that homes were going 10-30% over asking price (aka $800,000 list price -> $960,000 sale price ). We currently have a reprieve from bidding wars and paying prices over-asking. And as soon as rates drop again, all of the folks who have been sitting on the sidelines will jump back in and competition will be BACK.
BETTER NEGOTIATION LEVERAGE
We are finally in a position as Buyers to be able to negotiate! We can ask for things - repairs, closing costs, etc and reasonably expect to get them. We see this go away during times of intense competition. Also, if you have a home you need to sell to move, contingent offers are actually being accepted - yahoo! It’s a much more pleasant experience overall to be a buyer in this market than in the boom times of 2020 - mid 2022.
HOME PRICE APPRECIATION
Since January of 2023 in Gig Harbor home prices have increased 14% (January to August). Based on continued demand despite higher rates, economists expect home values to continue to rise. The longer you wait, the more appreciation you miss. Also, if you are in a rental situation, the longer you wait, the more money does not go toward building equity and your wealth.
These rates may last longer than we hoped, but they won’t last forever. If you’re curious about what it would look like for you to purchase by the end of this year or in 2024, we are always available to chat!
Since January of 2023 in Gig Harbor home prices have increased 14% (January to August). Based on continued demand despite higher rates, economists expect home values to continue to rise. The longer you wait, the more appreciation you miss. Also, if you are in a rental situation, the longer you wait, the more money does not go toward building equity and your wealth.
These rates may last longer than we hoped, but they won’t last forever. If you’re curious about what it would look like for you to purchase by the end of this year or in 2024, we are always available to chat!
