Buying a Home and Concerned Prices will Drop? I have been through 3 recessions, and I am always perplexed by the predictions that are made for the housing market. Each one has followed a similar pattern.
This really is NOT rocket science. Homes get too expensive creating a large supply, market conditions change and the law of supply and demand dictates that prices drop. This has been happening now for a while, and lately the drop has stalled, is slowing, or is rising in a few markets. Interest rates are creeping higher. The fact is, even a modest hike in interest rates will offset a drop in prices, even if the drop happens.
Not only that, consider how much more a home will cost over the 30 years of a mortgage if the rate is higher. Of course, if you are not comfortable, don't purchase now. However, in my experience of this process, now really is a great time to buy. If you think it may drop 5%, then simply offer 5% less than you would!
This is YOUR time to get a GREAT deal.
To my sellers who are concerned that I am suggesting a strategy that will have their prices dropping - I am suggesting a strategy that will put your home in the Selling Zone it needs to be in. If your home is not, your neighbor's home will be. Your higher price will have your neighbor's buyer thinking they are getting a bargain. You are selling your neighbor's homes for them.
If you need to hold out for more cash and can wait, take your home off the market, rent it out, hold on to it for the next few years. There's no guarantee like everything else in life, however prices are likely to rise. If you don't have time to wait it out, reduce it NOW, don't ride out the price drops for a year with everyone else. Don't sell your neighbor's home for them! Use your neighbors' higher priced homes to sell your home. Short sale it if you have to. Find a specialist to help you if this is your last resort.
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