Home Buying Tips
Lessons From a First-Time Home Buyer: Worst Time to Buy a House? There Are Always Exceptions
If you’ve been thinking about buying a house, looking at the news lately has likely disheartened you. As CNN reports, a recent Gallup poll found that 76% of Americans believe it’s a bad time to buy — with only 21% saying it’s a good time. There are several reasons for that sentiment, with the top two being the combination of high interest rates and high home prices.
So, are you SOL if you do want to buy a home right now? While it can be a challenge, it’s important to remember that these trends aren’t the final word. In fact, as someone who recently bought a home in these subpar conditions, I can say that there are always exceptions.
With that in mind, let’s take a look at some reasons why you may still be able to find the house for you in spite of current sentiment.
Why It Might Not Be the Worst Time to Buy a House
Local markets vary
Most of the time, when we look at the housing market, we look at national averages. However, just as the first rule of real estate is “location, location, location” your local area may have a completely different story. Case in point: when we bought back in November, our mortgage broker told us that Springfield was experiencing a “buyer’s market” despite many other areas seeing the opposite.
The moral of the story is just because you see overall trends moving one way doesn’t mean that it’s the same story everywhere. So, if you want a better idea of what to expect in your area, consider talking to a local real estate agent or mortgage broker — or, if you want to research more on your own first, look to local media sources rather than national ones.
Averages aren’t everything
Just as looking at national numbers may not be as helpful as you’d think, the same can be true when looking at averages. Well, actually, not just averages but median figures as well. For example, while the latest National Association of Realtors (NAR) report shows that the median price for a single-family home is now $389,400, marking an increase of 5% over last year, that doesn’t mean that you’ll need to spend that amount in order to find a home or even that the house you have your eye on is worth 5% more than it was last year. These are averages — and there are several factors that can affect them.
Although it may be true that home prices are on the rise in general, again, this isn’t a hard rule. Once again, this is where our personal experience comes in as, when we were buying, the house we ended up getting had its price come down several times before we put in our offer. In other words, while prices and values may be rising on average, that might not be true across the board.
There are other reasons for the rise
Speaking of rising house prices, it’s important to remember that there are many reasons why the value of a home can increase. While some of this is purely market-based, in other cases, it’s because homeowners or investors are making upgrades to their properties. When these upgraded homes are assessed and/or sold, the higher price they fetch can, in turn, affect the averages captured and reported by the likes of the NAR.
Of course, not every home has undergone major remodeling in the past few years. To that point, although we were pleased to see that our house had a recently replaced HV/AC unit and roof, other elements are admittedly dated. Yet, this made for a house that was priced much more attractively than others we looked at that had recent cosmetic “upgrades.” Therefore, by following a similar path, you may be able to find a house that remains unaffected (or less affected) by these apparent price hikes.
Everyone’s story is different
A theory that’s been floated more than a few times in recent years is that home inventory is down because, with interest rates north of 7%, no one who has a mortgage with a rate of 3% wants to sell their home and end up with a new loan at today’s rates. It’s a solid theory that likely holds a lot of truth — but, as I said in my headline, there are always exceptions.
What if a homeowner needs to relocate for work? What if a loved one dies and the family doesn’t need their house? What if the owner of home is actually an investor who paid cash for the house, has made updates to the house, and is now ready to “flip” it?
The point is that, even in a tough market, there may be homes that pop up. Once again, I have to point to our own experience here. When we were looking for houses in our budget, everything we found was in neighborhoods outside of where we were living. Then, seemingly out of nowhere, an anomaly occurred in the form of this perfectly-located house. In contrast to many of the flips we found around town, this was a house that had been a rental but was now for sale — which is why the “3% theory” didn’t apply.
Housing is unlike other markets in that there are some very personal reasons why someone might want to or need to sell. Thus, it’s far too simplistic to assume that the general story we read will be the same in every case.
So, in contrast to what the majority of people are saying, is now actually a good time to buy a house? Well, I’m not quite willing to go that far. However, I will say that, if you are looking to buy, I wouldn’t let the conversation surrounding the housing market get you down.
Even though the journey might not be easy, I sincerely believe that happy anomalies can still happen to you (as it did with us). Have hope, stay the course, and be ready to act. At the same time, be sure to do your due diligence, think clearly, and stay within budget! Then, in time, the right house will come along — market trends be damned.
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