Have you been pondering the idea of moving into a bigger home, but you keep hearing horror stories about how hard it is to buy a home in today’s marketplace. The real estate market has proven to be a wild ride for buyers and sellers alike – from the cutthroat bidding wars to the all-time-low interest rates. A lot of would-be buyers are understandably still nervous to buy and are considering waiting for the market to cool down. But holding off on buying your new house might turn out not to be the best strategy. Today I am going to give you 3 reasons why now may still be a good time to upsize even in a sellers market.
Are you someone who has simply outgrown your current home? Or maybe you are someone who is ready to move up into that next level home out of the starter home you bought a few years ago because you now have enough equity in your house to make it work? Or maybe you want a newer home or a more updated home and would rather buy than renovate. If any of these scenarios match your situation then you definitely want to read about the pros and cons of upsizing in a seller’s market.
Reason #1 : Pricing
For potential buyers wondering if they should wait to see if home prices will drop before buying, the economist and market data still show that you should consider buying now. And while we can’t predict the future, current data shows the housing market isn’t going to dramatically cool anytime soon. Although prices may stabilize a bit as material shortages and supply chain delays ease, forecasters can’t pinpoint when we’ll see those changes trickle down to the buyer level and impact housing prices. The takeaway, if you’re ready to buy a home, and you’re financially prepared to do so, it’s important to consider the risks of waiting and the potential for housing costs to continue to rise in the coming months. The con is that no one truly has a crystal ball to determine where prices will go whether up or down.
Reason #2: Interest Rates
While we are no longer seeing rates in the 2’s and 3’s (what I like to call FREE MONEY) we are still seeing historically low rates in the 4’s & 5’s. While there is always a risk of a price correction, if you have done the math and crunched the numbers and you are comfortable with the monthly payment your lender is quoting you and the home meets your needs, there are not many strong arguments to delay buying a home. Everyone who delayed buying in 2021 hoping to see a cool off in the market saw their purchasing power erode by 1%-10%. The con to this is that you never know if rates will drop lower again. However if that happens you can potentially refinance to take advantage of lower rates in the future.
Reason #3: Buy vs Rent
Believe it or not, it’s typically less expensive to own a home than it is to rent one. Yes – even in this crazy market. People are often led by emotions rather than calculations. Leading with emotions is not the best decision when you are making a huge financial decision that will impact your life for years to come. The beauty of a mortgage is that it’s a hedge against inflation. Rent prices have not stayed static, they have increased significantly right in step with the rest of the housing market. What does this mean for you? Well the average price of rents could be much higher in the future than today. If you lock in a 30 year mortgage you are locking in your monthly payment for the next 30 years without any unexpected increases.
The con to this is now you have a mortgage payment and should your housing needs change (ie. move for a job, upsize, downsize, etc) you’re not as flexible when you own vs when you can just give a landlord notice to vacate the property.
Now that you know my TOP 3 reasons why it may still be a good time to buy even in a sellers market in Phoenix, you may also be interested in learning how to buy when you need to sell a home. In this coming video you will learn the top 5 strategies I am sharing that can help you buy a home even when you have a home to sell.