Should I wait for prices to go down?
Does it make sense to wait for prices to go down before buying a house? Look at the big picture before you make a decision and get the most house for your money?
“I'm gonna wait for prices to come down before I buy a house.” This is one of the things that I hear daily!
While I totally understand wanting to get the best possible price, I want you to be aware of the current market dynamics.
There's a couple of very important data statistics I would like you to have a look at:
Right now, the months inventory here in Snohomish County, is 0.9. That is historically extremely low! You have to have about a six-month inventory supply for a “neutral” or “balanced” market.
An inventory of 0.9 months is in favor of the seller. With such a low supply, prices are gonna keep creeping up. They will not start decreasing until we see the inventory level rising… How long that will take? It might be three, four or even five years to get back to a six-month inventory level with prices going down.
What that shows us? Be aware of the big picture! Because with waiting too long, you could get priced out of the market.
Are you a renter?
This goes in particular if you are a renter. With not owning a home right now, you don't have something that's going up in value while you're waiting to purchase your next home. The other huge thing you need to be aware of are the current interest rates. These are crazy low: Most of our clients are benefiting from a 3.7 to 3.9% rate.
Let’s make a little thought experiment:
If you purchased a $400,000 home 8 months ago, you would have about 4.5% interest. That was a monthly payment of about $1,620. Right now, you could a mortgage rate of 3.75%. That means that you can go buy a $440,000 home. With 10 percent more house, you would have the exact same payment!
Again, it’s important to see the big picture...
Please don’t hesitate to your out if you've got questions about what's going on in our market. I'm happy to connect and help you!