The second thing to consider is YOUR OWN FINANCIAL SITUATION. The "right time" is different depending on whether you're a middle-income first time home buyer or someone with higher income and equity already in your home. For first time buyers this is a great market because sellers will be more likely to accommodate weaknesses in your offer because they're just glad to be getting an offer. If you've got a low down payment, if you want the seller to pay some closing costs, or even if you want to do a lease-option (a rent-to-own arrangement) sellers will be far more likely to consider your offer now than they would 3 years ago when most homes were getting multiple strong offers quickly.
For this reason, first time home buyers should aim to make their offer before the low point in prices in their area. While prices are still dropping, sellers are more willing to accommodate special situation. In this graph of the median home prices in Seattle, the best time for a first-time home buyer would be where the yellow arrow is, because that's right before the bottom according to the orange line, which is the 90 day average. That's the time when the prices are low, but sellers are still willing to consider weaker offers.
On the other hand if your finances are in great shape and you're able to make a strong offer with a sizable down payment, the very best time to buy would be where the green arrow indicates. That's the point when prices are very low and have begun to level off. So it's important to know your own financial situation as you're considering a home purchase. The best way to get a concrete picture of your finances as it relates to home buying is to get pre-qualified for a loan by a mortgage broker. Also, click this link to see where Pasadena median home prices are right now.
Next time, we'll talk about how mortgage rates can affect your home-buying decision...
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