The pandemic has affected all aspects of everyday living. Real estate was a big part of the unusual with homeowners and buyers being less affected financially by the pandemic than renters.
The housing market has stayed strong through it all but can it be like this forever? Economic inflation continues to increase in prices for consumers daily. Inflation is considered normal in small amounts but the current inflation continues to rise. This is affecting daily living from when we go to the gas station to even the prices of homes.
There's a limited amount of homes available for sale which is making the home prices go up. Low inventory is due to a few things. The pandemic delayed construction sites and also homeowners who would’ve considered moving didn’t, due to lockdown.
This creates what we call a ‘sellers’ market. Sellers are favored by receiving more than one offer at a time and are typically above the asking price. This can make the market more difficult for buyers because they have more competition and will have bidding wars.
Pros and Cons if you want to sell your home
If you’re looking to sell your home, it shouldn’t be too difficult. Consider that once you sell your home, you’ll have to find another place to live. This means you’ll also be joining the buyer competition for a limited amount of homes available.
Due to the pandemic, there’s a lot of homebuyers who work remotely and want more home space.
Homebuyers are paying more than usual for homes because of low inventory, which is beneficial for sellers.
Buyers are desperate to get into a home, some are even waiving conditions like inspection and appraisal contingencies in their contracts.
The market is at one of the highest points in history, so it’s a good time to sell in general.
You won’t have a problem selling your home but it may be hard finding another one.
Home prices are up by more than 17 percent since last year, according to the National Association of Realtors. This can mean you won’t really have extra money from your home sale because you will need it to make your next home purchase.
Low inventory means high prices and rents which can make it hard to find your next home.
Pros and Cons if you want to buy a home
Although the market has more traffic than usual, you can still get into a great home if you make the right moves. Make sure the numbers work for you and work with someone who will understand the current situation. Getting a pre-approval before house hunting is a must. Make a big down payment if possible because this will be more appealing to the seller and you’ll also be taken as a serious buyer.
Mortgage rates are at an all-time low. You will pay more for your house than you’d like but your borrowing costs will be lower. Meaning your monthly payments are still affordable even if you take out a bigger loan.
Experts are saying this isn’t a repeat of 2008. Buying a home now and trying to sell again soon may be a short-term loss but there shouldn’t be a large number of foreclosures like there were in the past.
Buyers must be prepared for bidding wars and to lose on multiple properties before finally sealing the deal.
Reconsider your budget and must-haves. Most homes are selling over the asking price so your budget may not get you what you hoped for.
It’s possible that you may see your property value drop after you close and the market levels out. If you’re buying a home that you will be in for a long time or forever home, the value will eventually recover.
Should you wait for inflation to drop and inventory to increase?
There’s never a perfect time to purchase a home. It truly depends on what you’re comfortable with. If the numbers make sense to you in terms of the monthly payments and you have found a home you like, then now is a good time to buy if you can.
If you aren’t completely comfortable with buying now, it could be worth it to wait until the market levels out and is in favor of buyers.
Whatever you decide to do, it’s important to have your finances in order so you can be in the strongest position when you decide it’s a good time to buy. If you decide to wait, keep saving money for a down payment. Try to keep your debts low and credit score high. If you want to know where you stand, we offer free mortgage consultations and even put you on a personalized mortgage plan to get you into a home as soon as possible.
Everyone should have an equal opportunity to own a home. This can create generational wealth and security for you and your family. Schedule a call with us today to learn more.