One of the most common questions I get ask is “How is the market?”, and I normally answer “It depends”. Many times this gets people confused and seems like a sales answer, but it really depends.
When someone is telling a story about a restaurant they visited, what is the most common question? “How was the food?”, right? It depends. Some people may love it, while others would never go to the place. The same thing is with the real estate market. It depends on whether you are looking to buy or sell, in what area, the price range, fixer-upper or turn key…All this factors into how to get a straight answer.
Over the last few years, the market was great for most sellers, but for buyers, not so much. There were not enough choices, and even when you found a house, there were sometimes dozens of other buyers making an offer on the same house. Anyone considering buying a house was very frustrated. However, we know that market is cyclical and eventually it will level off. Good news for all the buyers, that level is happening right now.
Here are the 3 reasons you should buy a house now.
- Relatively high inventory. Over the last few years, the DFW area has seen tremendous growth. More people moving to the area needing a place caused the shortage of inventory. It took a few years, but this year it has finally caught up, and there are more homes available for sale. Better yet, now you have more choices on new homes as well (little secret: builders are more willing to negotiate).
- Low interest rate. In January of this year (2018), the interest rate was 4.03% (FreddieMac). By July the rate went up to 4.53%, only a .5% difference. However, on a $300,000 loan that would translate about $88/mo PI extra (Principal and Interested). Applying that extra to your payment at a lower interest, you would pay off your mortgage about 3.5 years sooner. Most lenders I have spoken to are predicting that the rate will go up another .5-1% in the next year.
- Less competition. Most homes are sold in the summer months, that’s when the competition is the strongest. This competition drives the prices up too. However, as the school year starts, many buyers put off moving to the next year. This is the right opportunity for you as a buyer, as you won’t have as much competition from other buyers driving the price up.
Please note that this may not apply to all markets and situations. Its best to talk to your trusted Real Estate agent, Lender, or Financial advisor.
Lastly, if you want to lower your tax burden and increase your net worth, according to many economist and financial advisors, owning real estate is about the best thing you can invest in. Ever wonder why wealthy people own so many homes?