Hope all is well.
The day after the Super Bowl is held here………
…is too late. The housing market is clearly beginning to calm down. While it will remain a “Seller’s Market”, there at least appears to be some buying opportunities over the next few months. I’ve been telling all my buyers over the last 4-5 months to “hold off” on purchasing. I know that’s been hard……but I just didn’t want my friends needlessly THROWING AWAY tens of thousands of dollars in senseless bidding wars. And now, the trends that I predicted would come about, have. I’m not always right, but after closely watching statistical trends for 19 years in real estate, it quickly becomes apparent about what’s going to happen. And now the beginning of that “window” is starting to happen.
Part of the reasons why buying in the next 4-5 months is because this year (after a year of COVID that blew up seasonal patterns) the “seasonality” of buying trends has now returned. I’ve personally researched housing prices, and historically homes sell for an average of 1-4% less during Oct, Nov, Dec and Jan (than at any other time of the year). The reason? Sellers are more intrinsically motivated during those months….in other words, if a seller is selling during those months (Halloween, Thanksgiving, Christmas and New Year’s) it’s because they HAVE to, not because they necessarily WANT to. Very few people voluntarily sell their homes when they are celebrating holidays or having out-of-town guests come over. Normally this is because of “Death, Divorce, Job Change or Financial Difficulty”. Timing your buying during seasonally advantageous times is just plain wise.
So if you plan on buying a home over the next year or so, it’s best to do it sooner than later…..certainly before the Super Bowl, because annually that’s when the Real Estate Season begins its big “kick off”. So I’ve come up with 10 reasons that would be in your best interests to buy before Tom Brady (or Matthew Stafford THIS YEAR!) shows up on the big stage …..
Here they are:
1.) Low interest rates….pure and simple. But after Feb 14th, interest rates will have a higher probability of rising more rapidly.
2.) Slight Supply increase RIGHT NOW— while this time of the year (Oct thru Jan) normally sees a strong decrease in supply of homes for sale, most projections say we’ll see a slight rise in supply. That’s because there are, and will be, less buyers out there gobbling up any new inventory. Leaving more homes for you to look at….
3.) Statistics over last 30 years show buyers get better deals during these months (Oct thru Jan)
4.) Less buyers are currently (Oct thru Jan) out there. Old adage: Don’t do something when you’re “one of many” but rather do it when “you’re one of a few”. Buying when others have given up, or are just waiting, means you will have a leveraging opportunity
5.) Projections by local economists say the next Spring Buying Season will be HUGE. That will start on Feb 14th. Interest rates will still be low, and fanaticism will be back. The 15 to 50 offers scenarios will very likely be BACK!
6.) There is “NO BUBBLE IN THE HOUSING MARKET” according to CSF, UCLA, USC, CHAPMAN and BEACON ECONOMIC think-tanks.
7.) If you buy now, you will take advantage of the projected rise in house values of between 4% and 8% (between Oct and Jan, which will be a rise of about 1% a month!). In other words, you will participate in that rise, rather than watch others get those gains in their equity accounts. It’s better to take advantage of, rather than being taken advantage of.
8.) By the start of 2022, the “Buyer Offer Fatigue” (BOF) that caused so many buyers to abandon the real estate market and just rent for a year, will have worn off (and their leases will be up) by then. Buyers, like most human beings, have short term memories, especially when interest rates are so favorable. So, most economists and pundits foresee a massive “jumping back in” the market, which will start up the bidding wars again, especially in mid Feb (2022) when inventory will be at its lowest ebb of the year. Buyers will be forced to compete aggressively again.
9.) Rental Rates are projected to go up 4-8% in 2022!! So, if you wait until 2022 to buy, you will be competing with a whole new wave of renters wanting to chuck these new rental hikes….by buying a home (and not paying someone else’s mortgage!)
10.) The Cost of waiting to buy until Feb 2022 is projected to be HIGH! If you look at the chart below, two things will have increased by next February: prices of homes and interest rate percentages. Appreciation between now and then is projected to be above 6% and interest rates are projected to go up to the mid 3% range. That means that your monthly costs will increase by OVER $250 a MONTH, or over $3000 a YEAR! Waiting any longer will be painful.
I’m setting up times to meet with buyers and their families so we can strategize about the best days and times to see homes. Let me know and good time, and we can set that up.