Buying a home is already a huge decision but with the climate changing almost daily should you buy now or wait??

The allure of low interest rates have enticed many buyers to throw their hat in the race in hopes of buying their dream home. Ultimately the decision should be made on many factors but this post is outlining some of the pros and cons of this life decision based on the current Real Estate Market. 

1. Rate or wait – After receiving an email from your lender saying you qualify for an even better home because of the lowered interest rates; it’s pretty hard to pass up on the opportunity.  In some cases there are folks who once qualified for $350,000 finding themselves being able to buy a home for $400,000 just because rates are so low. If you opt to wait it out you may miss the wave and more importantly the opportunity to buy your dream home. 

*quick reminder: Make sure you lock in your rate if you can. if the market shifts you don’t want to miss out on the best rate possible.

2. “Inventory Blues” – If you live in the North east and most likely anywhere in the USA then you are seeing inventory shortages.  These days there are many buyers a few houses and the gold rush is on! Although rates are great do you have it in you for long open house lines, bidding wars and disappointment if you lose a bid? We are seeing buyers overpay for properties, waive appraisal contingencies and even come out of pocket to make deals work… Are you up for it? 

3. Is moving a need or a want? – buying a home isn’t cheap. There are upfront expenses (appraisals, home inspection etc) and of course down payment and closing cost. Are you buying because you need to move or suffering from FOMO (fear of missing out) give it deep thought because this market is extremely tough for those casually looking. Can we say buyers remorse…

4. Market Crash – if you watch the news then you know the market is a bit unstable right now. The feds are lessening up on their covid relief so rates are likely to rise and the foreclosures and evictions are in the rollout phase so expect a ton of distressed properties to hit the market in the months to come. What will all of this do to property value? The potential negative impact could cost many buyers who buy during the height of the market thousands in loss equity. If you are considering a purchase then definitely measure 5 times and cut once. 

5. Is your job secure? – The government has given many a lifeline during the COVID-19 pandemic but on the flip side it has crippled a lot of industries in the process. Also, there is a vaccine initiative in place where most employers are forcing employees to get vaccinated.  If these factors can or will affect your job then strongly reconsider your position.  Before March 2020 the world was a very different place and in light of the changes in the world many buyers have lost jobs, lost revenue and sadly have lost lives.  Buying a home is great but you have to be in tune with your situation before you jump into these real estate waters. 
The moral of the story is this; rates go up and down so if you are in a position to capitalize off the low rates then go for it but don’t be pushed by fear and regret things later. In this business it’s all cyclical so this will happen again.  The idea is be 99% prepared and wait (or create) that 1% luck. 

Happy House Hunting Folks!!

Written by Malik Crichlow, Broker of Record GoodBuy Homes NJ Realty