It's a popular question right now. "Should I buy a home?"
I am getting this and other questions from past and new clients. Should we wait to buy? I find that fear is driving most of these questions. Fear of losing money, fear of spending too much money. Fear of missing a good deal. I like to step back and look at the bigger picture. Why are you moving in the first place? Job relocation? Retirement? Be near family? Downsizing? Up-sizing? Building equity for the first time? How are you going to feel in a year, two or three if the economy is worse than you think it is right now?
I remember meeting a couple during the last market crash. They wanted to sell their house in town, and buy a place in the country. Property values had dropped about 25-30% at that point, so there were several good deals on the market, mostly short sales. Most properties they were looking at were in the $300,000 range. They felt that was too much, they would continue to wait for prices to drop even more. Well, eventually prices went up, way up. And worse, inventory went down. The types of homes they were looking at just a couple years later were over $500,000, and you had to fight like mad in bidding wars to get one. But that isn't the saddest part to me. They lost out on buying their dream. Their dream of having their horses on their own land, of the grand kids coming over and paying in the field. They lost out on the opportunity to ever buy their dream.
As a buyer, if you need to buy now, or the near future, let's look at the facts. Interest rates are extremely low, making it cheaper for you to borrow the money, assuming you are not paying cash. For example, let's say you borrow $300,000 at 3.92% on a 30 year mortgage. Your monthly payment of principle and interest only is $1418. But, if you borrow that same $300,000 at 5%, your payment is now $1610. That's about a $200 difference in savings to you, just for buying now.
No one has a crystal ball. No one knew back in 2008 how long that recession was going to last or how far the real estate market was going to drop. So please, do not listen to anyone that claims to know the future. All we can do as be here for your current real estate needs. If it's time for you to move, it's time.