When it comes to buying a property, we all have various motives, but one we would all agree on would be: to avoid losing money by any means!
Eventually, you can reduce the risks of buying the wrong property, following the advice of your realtor, or real estate professionals in the designated area.
Some criteria are easier than others to predict, but one thing we learned from the pandemic is that anything can happen, either good or bad for the real estate market.
The economic perspective has shifted since 2019, we’ve witnessed some of the most surprising outbreaks like the following number:
Two-thirds of people who purchased a property in 2020, sent their offers through without even seeing the unit! This speaks volumes about the competitiveness of the current market. This second number reflects the same: by the end of 2019, units were on average staying 51 days on the market, against 24 in late 2021.
Gathering all this information, potential buyers wonder if they should buy now, or wait until the market cools down.
The question of when to buy is mostly asked by first-time buyers. Nowadays buying a property can be life-changing, especially if you’re planning on living in the unit as a primary home. In fact, buying a house is always a commitment but it sounds even more important to them as it’s their first time.
What has been exposed during the pandemic is just the exacerbated result of the previous imbalance between supply and demand in the U.S. The repercussions of the pandemic didn’t help: the repetitive pauses in construction, due to the multiple restrictions and the supply shortage of building material, all of these circumstances adding up makes prices go up inevitably.
Fewer houses have been built in the 2010s, roughly half of what has been built in the 2000s!
Plus, borrowing money has become cheaper in the past few years. We also observe the current demographic: Millennials are reaching their estimated mature buying age if there were ever an age for it!
Mix up these factors, and you just created one of the widen gaps ever seen in the Real Estate market: by the end of 2020 the country was lacking 3.8 million homes to meet the buyer’s and renters’ needs!
Expert & statisticians are very clear, even though prices will most likely stabilize (at a high level), no decline is predicted yet.
However, 1 component is to be taken seriously. The potential rise in interest rates. This could ultimately defuse the madness. As we know, people could be less inclined to buy, which would significantly decrease the demand.
In a perfect world, buyers would purchase a house at the ideal time, when the market is low, and about to shoot up! But real estate is like life, unexpected events do happen, and finding this magical combination where every aspect is aligned with one another seems unattainable.
Also because, how do we know a time is good or bad in the present, retrospection would be the only possible way to examine a situation afterward?
To summarize, the best strategy would then be to look at a purchase from a different point of view, the long run, and not a quick return on investment that would apply pressure and anxiety onto your purchase. Perhaps buying a house motivated by the idea of living there for roughly 5 years can release some apprehension.
The obsession with optimization in real estate can be disappointing. At the end of the day, if you possess the financial liquidity to buy, then why not buy some might say.
To finish, one thing uncertain we know for sure, the future holds some surprises, positive or negative, depending on your position, so you might as well make the move whilst you can!