I know I’m writing this post at 3:00 PM which hardly qualifies as “Monday Morning” except for exceptionally late sleepers . . . but at least it IS still Monday 🙂
For the past several years, my colleagues (and sometimes I) have been singing from the hilltops about the importance of BUYING and/or SELLING A HOUSE NOW . . . because if you don’t do it NOW, you may miss the boat.
We all know that the best time to buy or sell a house is when the time is RIGHT to make a move. We also know that most folks start thinking about it several months (or years) before doing anything about it, and we sometimes wonder: “What are you waiting for?”
Some folks are “Playing the Market” and are very cognizant of the current market conditions. These people watch very carefully and hope to hit that sweet spot in which they can sell their current house at TOP dollar and buy their next house at the BOTTOM all the while scoring the lowest mortgage interest rate EVER.
The reality is that hitting this “Trifecta” of TOP – BOTTOM – LOWEST at the same time has minuscule possibility of happening and may even be an impossibility.
When REALTORS urge you to BUY NOW, we are usually doing it because one (or 2) of those 3 conditions are ripe and we are nudging you to, if the time is right for you, seize the moment and TAKE ACTION by Buying a House or listing your current house for sale.
To the average consumer, these urgings may seem akin to crying wolf because for as many times as you’ve heard “BUY NOW” the sky has yet to fall . . . the wolf has yet to attack . . . and the market continues to plod along.
THIS time, we’re not just crying wolf . . . Here’s why:
As I write this post, I am aware of a symphony of factors playing out which can and will significantly affect “Buying Power” of Home Buyers . . . and this will indubitably affect Home Sellers also.
There’s a compounding effect happening right before our very eyes.
Mortgage Interest Rates are beginning to increase. We knew this would happen one day . . . and that day has come. There are some delusional folks who think that they are just “Ticking up” and with “tick back down” . . . I don’t think so . . . I believe they are only heading ONE direction – UP!
As interest rates rise, Home Buyers lose ground with the buying power of every dollar . . . and subsequently will be able to buy LESS house for the same amount of money (payment).
At the same time, the economy is improving, Housing inventory has all but disappeared, so house PRICES are rising.
This is inflation that anyone who took economics in college KNEW would follow the recession/depression . . . It’s a cyclic reality in the Macro-economic cycle.
When prices rise, Buyers get less house for the same money as before.
Buying power decreases and prices increase with limited inventory all equals frustrated buyers (who have all been ecstatic with having their way for the past 5 years).
So . . . We cannot turn the clock back, but we CAN take action NOW.
I believe that the passing of time is not our “Buying Power Friend” . . . Rates and Prices are going to continue to rise through 2013 . . . and then most probably more significantly as we slide into 2014 (Federal ceilings expire).
That all sounds somewhat Draconian . . . I really didn’t commence writing this post with the intent to depress you . . . and I have a ray of sunshine for you.
BECAUSE housing inventory is SO low . . .
and BECAUSE more Buyers are swarming into the market as they realize they are losing buying power . . .
There hasn’t been a better time to list a house for sale any time in the past 5 years.
While there probably have been better times to BUY (Low rates, low prices, and lots of inventory) . . . if you haven’t bought yet, you’ve missed that boat . . . but that doesn’t mean you’re out of the game altogether.
If you want to buy a house, TODAY is a better time in terms of buying power than next month or next year.
I’m not crying wolf this time.
Connect with me if you’d like to bring this line of thinking more “real” relative to your own personal scenario. We can sit together for a 1/2 hour consultation and unpack it nicely.
Remember . . . the passing of time will not improve these conditions.
Hope you have a fabulous 4th.