The housing market is on fire right now – and the general theme is that it’s not a good time to buy because of it. But, we’re here to say otherwise as we believe it’s a little bit of yes and no as you should have extra equity from the sale of your current home and be able to access low-interest rates. The main thing to remember here is that this is your home – not stock or investment.
Our belief is this: buyers should not be discouraged by the current market conditions.
Sure, home values have increased significantly. However, paying slightly above-market won’t matter in the long run, especially if you intend on staying in the home for an extended period of time. Historically, home appreciation has maintained a fairly linear trend so, if this year we’re above that trend line, future years will be below the line. Essentially, in the long run, values will revert back to standard norms.
If you’ve sold your home or are selling in this hot market, you can use the extra equity from your sale to put MORE money down on a new one, PLUS take advantage of super low-interest rates to offset any fear of overpaying. (Said another way, the amount you’re truly paying for your new home is not affected as much as it might seem).
And, there are still great opportunities to purchase, it just requires more digging and some adjustments to your approach.
For this, we recommend a few things. You could find a home that needs work and use that as an opportunity to personalize it and create MORE value. Alternatively, you can find a home that has some sort of dislocation such as a seller’s job relocation, or it’s fallen out of contract a couple of times meaning that the seller is willing to negotiate.
You’ll want to start by searching below your budget in preparation to bid up or have money to fix up. In addition to this, here are our recommendations:
- Your offer should be as clean as possible. Look to offer higher deposits, and perhaps write a personal cover letter along with the offer.
- Remember that offers are not just about price; figure out what issue you can solve for the seller. Perhaps this means a firm deal with a delayed closing, or maybe you close but the seller can stay in the home for a period of time post-closing.
- Lastly, work with an experienced broker, and be educated on comps and values so when you see “it” you’ll know it. This way, you’re quicker and confident in your offer and negotiations.
By the way, we don’t see this supply issue that’s created the seller’s market ending anytime soon.
Houses available for purchase may seem in short supply, however, this is as a result of significantly increased demand more than a lack of supply. Increased household formations combined with post-Covid desires of buyers to relocate or modify their housing needs will continue to fuel this demand. Additionally, new home supply cannot keep up with this demand due to the scarcity of land and labor, and material shortages.
If you were already considering moving in the next year or two, you may want to accelerate that timeline given the current market conditions… We also strongly believe life is too short to put off what you really want in a home or neighborhood, and selling now will move you closer to your dream and vision of the perfect-for-you-home.
Your trusted Freebird agent will guide you through the sale, and purchase, of your new home. Contact us today to get started!