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Proof That Buying a Home Now Is a Better Time Than You Think

Proof That Buying a Home Now Is a Better Time Than You Think

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What’s going to happen with rates and prices if I wait?

Prices have gone down a bit and that is mostly due to higher rates. Which if you think about it, they kind of cancel each other out. That said, now is a great time to consider buying as MANY lenders have programs to help with rates and the housing market is such that it is not super competitive, at least compared to the past few years. You can definitely get into a home without outbidding someone, at or even below full price, and with a few terms and/or repairs to boot.

No one knows what will happen with rates, although we hope we are very close to the ceiling, if not already there. This will keep prices in check for a bit, but honestly the moment rates swing down closer to the 5% range, at least in Central Oregon, there will be significantly more competition. I would suggest talking with a lender and seeing what your current options are now. Doesn’t mean you need to buy, but things will look a little better than you might think.

The best question to ask yourself when it comes to home buying is (after gathering all the information you can) can I realistically afford a home in the area I want to live? If the answer is yes, go look at some homes and see if anything within your price range feels right.

Here are a few other questions to consider…

  • Do I plan to live here for the next 3-5 years?
  • How does a lender-provided (potential) mortgage payment fit into my budget?
  • What other expenses should I be considering, and do they fit?
  • How much is my potential down payment and where is that money coming from?
  1. Mortgage rates are still very low

So recently, over the last 10 years, we have seen incredibly low interest rates. Like too low. This was just part of our rebound from the happenings of 2007-ish. Those rates do not reflect a “normal” market and could & should never be maintained. Rates in the 5%-7% are much more typical. Although I would personally love to see them in the 5% range, getting into the high 6% is not abnormal. It just feels that way because everyone else, or so it seems, has an interest rate of 2.6% and we want that too… sorry… probably not going to happen again, for a very long time. And honestly, if it does, it probably means something seriously negative has happened to our economy. Piece of advice: talk to a realtor and get a recommendation from a lender, they can walk you through your options, and should do it with zero pressure. (See our finance page for who we suggest)

  1. Timing the Market

Don’t try to time it, just buy, or sell or do nothing, when your specific situation calls for it. Timing stocks, planning a perfect sunny beach vacation, buying and selling at the “right” time. Doesn’t work, just do it when you are ready to do it. And by ready, I mean have a need to do so and have gathered the appropriate amount of information you need to make as educated a decision as possible. That is the “right” time to buy or sell….and go on that vacation

  1. Real Estate is foundational to net worth

Being a homeowner is one good way to build wealth. It is not the only way, nor is it always a way, but history has shown that the majority of us build our wealth through the home(s) we own. 

Here are some thoughts:

Build equity by taking care of your home. Do the necessary repairs and upkeep as your circumstances allow and as they come up. Your home will almost, most likely, naturally appreciate. That means it will most likely gain value just by owning it for longer. It is not uncommon in the Bend area to sell a home you bought years ago for a hundred or even two hundred thousand dollars more than what you paid for it. Now, there are many factors that go into that, but a kept-up home nearly always appreciates quite a bit, over the years, in our market.

It is a bit overblown, but owning a home as opposed to renting can be a big advantage. There are times to rent, but it will never directly help you build wealth.

There can also be tax advantages to owning a home – but that is a conversation for your tax-guy. 

  1. Opportunity cost of waiting

Like anything worth investing in, the sooner you do it, the more time you allow that opportunity to grow. Not that you should rush to buy, but you should 100% rush to educate yourself on what is right for you right now. Don’t let months and years go by without knowing your options, that is a really bad use of the time value of money.

There are many costs to consider when owning a home, and there can be less to consider when renting. That said, your payment is fairly fixed as a homeowner, but rarely fixed as a renter. Yes, there are more factors to consider, but that is a very real one to always have at the top of your mind.

  1. A balanced market

A few things to consider:

Sales to list price, ration decline. Fancy way to say that people were paying more than the listed price of homes, now they are not. In Fact, in Central Oregon, we have begun to see a few price reductions happen before homes get an offer. Not always, but a significant amount of the time. This means sellers want to sell, they get a little ambitious about what they will get, get a reality check when no one breaks down their door to buy it and then drop their price in order to drum up more activity. We are seeing more reductions and far less homes being sold over their listed price.

Days on market. The amount of time a home takes to get an accepted offer. This number varies from area to area, and is still fairly low in our market, but it is taking nearly 3 times as long now to sell your home than it has been for the past couple of years. And in the end of it all, more days on the market spells better things for buyers. Prices go down over time on the market, generally, terms for buyers improve, and the experience in general is far more favorable to buyers, when days on market ticks up a bit.

Seller Credits. These were dirty words for the past couple years. Asking a seller to do much of anything was a great way to get your offer rejected. However, this is no longer the case. Asking for some money back to do this or that, is a thing again! Now a good agent and lender need to guide you here, but getting money for repairs, improvements, etc, is possible in the right situations. Just talk to professionals and they will guide you.

There are many convincing reasons to start investing in a home in today’s market. That said, the only thing we know for sure is that we don’t know what the future holds. So… get educated, understand your options, and if the time seems right – jump in! 

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