Do you think it is a good market to buy?
Member since 2020 · 4 posts · 1 vote
Do you think it is a good market to buy?
Most Popular Reply
Realtor · Panama City Beach, FL · Member since 2018 · 122 posts · 63 votes
4yHey @Rani Shukla! Great question. This is the same thing people are asking themselves all around the country! I think the decision to buy shouldn't necessarily be based solely upon the market conditions, but rather your personal ability to buy what works best for you.
Obviously this is not the same market we saw 6 or 12 months ago. Things have changed rapidly and housing has become less affordable than it was before. Buyers need to keep in mind, however, that things will continue to change and always have. According to many real estate professionals, now is the best time to buy this year. The Fed has plans to continue to increase interest rates for the foreseeable future, so things may get even less affordable as time goes on.
That being said, just as rates are going up, they may eventually come back down! We may never see the 2-3% interest we have before, but they will continue to change throughout the course of time. This becomes a problem when people decide to "wait and see" or "hold off until rates come back down". What if they never do? What if today's rates are the new normal? I would rather purchase a home now that I can afford than wait and potentially afford less in the future.
What if rates do go back down and you're stuck with a "high" interest rate from purchasing today? You can refinance! Even if they go down significantly, you have the option to remedy that higher interest rate by refinancing.
In addition to rates, we are projected to see upwards of 20% appreciation over the next 3 years in the housing market. 6-9% over the rest of 2022, 4-6% in 2023 and 3-4% in 2024. As we continue to have shortages in supply, we should continue to see the demand that supports that appreciation.
Moving out and renting the previous home is exactly how I got my first rental property. It is a great strategy to get started as long as your current home will perform well as a rental.
Considerations before making your decision: Can you afford the home you want as your new primary residence? Will you have enough cash in reserves after the purchase to support your new rental property? Does your current house make sense as a rental? Do you have a back up plan for the property if the rental doesn't work out? How much potential profit will you lose out on between appreciation and cash flow if you decided to wait?
There's never a perfect time to buy. If all my answers to these questions made sense, then I would do it! With the right research and plans, the market doesn't necessarily matter. Waiting for the right time could be the thing that hurts you the most!
7 Replies
- 4yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
run the numbers on your current home to see what it would look like as a rental. Also evaluate the costs of buying a new property for you vs staying in the current home.
- Realtor · Panama City Beach, FL · Member since 2018 · 122 posts · 63 votes4y
Hey @Rani Shukla! Great question. This is the same thing people are asking themselves all around the country! I think the decision to buy shouldn't necessarily be based solely upon the market conditions, but rather your personal ability to buy what works best for you.
Obviously this is not the same market we saw 6 or 12 months ago. Things have changed rapidly and housing has become less affordable than it was before. Buyers need to keep in mind, however, that things will continue to change and always have. According to many real estate professionals, now is the best time to buy this year. The Fed has plans to continue to increase interest rates for the foreseeable future, so things may get even less affordable as time goes on.
That being said, just as rates are going up, they may eventually come back down! We may never see the 2-3% interest we have before, but they will continue to change throughout the course of time. This becomes a problem when people decide to "wait and see" or "hold off until rates come back down". What if they never do? What if today's rates are the new normal? I would rather purchase a home now that I can afford than wait and potentially afford less in the future.
What if rates do go back down and you're stuck with a "high" interest rate from purchasing today? You can refinance! Even if they go down significantly, you have the option to remedy that higher interest rate by refinancing.
In addition to rates, we are projected to see upwards of 20% appreciation over the next 3 years in the housing market. 6-9% over the rest of 2022, 4-6% in 2023 and 3-4% in 2024. As we continue to have shortages in supply, we should continue to see the demand that supports that appreciation.
Moving out and renting the previous home is exactly how I got my first rental property. It is a great strategy to get started as long as your current home will perform well as a rental.
Considerations before making your decision: Can you afford the home you want as your new primary residence? Will you have enough cash in reserves after the purchase to support your new rental property? Does your current house make sense as a rental? Do you have a back up plan for the property if the rental doesn't work out? How much potential profit will you lose out on between appreciation and cash flow if you decided to wait?There's never a perfect time to buy. If all my answers to these questions made sense, then I would do it! With the right research and plans, the market doesn't necessarily matter. Waiting for the right time could be the thing that hurts you the most!
- Financial Advisor · San Antonio Texas · Member since 2022 · 100 posts · 53 votes4y
Quote from @Cody Smith:
Hey @Rani Shukla! Great question. This is the same thing people are asking themselves all around the country! I think the decision to buy shouldn't necessarily be based solely upon the market conditions, but rather your personal ability to buy what works best for you.
Obviously this is not the same market we saw 6 or 12 months ago. Things have changed rapidly and housing has become less affordable than it was before. Buyers need to keep in mind, however, that things will continue to change and always have. According to many real estate professionals, now is the best time to buy this year. The Fed has plans to continue to increase interest rates for the foreseeable future, so things may get even less affordable as time goes on.
That being said, just as rates are going up, they may eventually come back down! We may never see the 2-3% interest we have before, but they will continue to change throughout the course of time. This becomes a problem when people decide to "wait and see" or "hold off until rates come back down". What if they never do? What if today's rates are the new normal? I would rather purchase a home now that I can afford than wait and potentially afford less in the future.
What if rates do go back down and you're stuck with a "high" interest rate from purchasing today? You can refinance! Even if they go down significantly, you have the option to remedy that higher interest rate by refinancing.
In addition to rates, we are projected to see upwards of 20% appreciation over the next 3 years in the housing market. 6-9% over the rest of 2022, 4-6% in 2023 and 3-4% in 2024. As we continue to have shortages in supply, we should continue to see the demand that supports that appreciation.
Moving out and renting the previous home is exactly how I got my first rental property. It is a great strategy to get started as long as your current home will perform well as a rental.
Considerations before making your decision: Can you afford the home you want as your new primary residence? Will you have enough cash in reserves after the purchase to support your new rental property? Does your current house make sense as a rental? Do you have a back up plan for the property if the rental doesn't work out? How much potential profit will you lose out on between appreciation and cash flow if you decided to wait?There's never a perfect time to buy. If all my answers to these questions made sense, then I would do it! With the right research and plans, the market doesn't necessarily matter. Waiting for the right time could be the thing that hurts you the most!
^^^ Everything he said. I buy when I'm ready to buy. I don't let interest rates stop me. I don't let a cooling market stop me. I figure out how to position myself to win in every condition. The market conditions definitely affect how much I can buy, where I buy and what type of property I buy, but when I'm ready I move forward. If you ask any financial advisor, "When is the best time to buy a stock or invest in an asset?" A good advisor will answer, "Today." Investing isn't about TIMING the market. It's about TIME IN the market. If you're ready to buy in these conditions, then move forward with confidence and leave the fear behind you.
- 4yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Rani Shukla
Exactly as @William Joel Idleman stated above. The people that are waiting to time the market for another 2008 will be waiting forever. If the deal makes sense, go for it. - 4yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
A local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better.
Use Rentometer.com or BP Insight to have an idea of what the property will rent for.
If you don’t have access to either, then use 90% of whatever Zillow Rent Estimate is.
For example, if Zillow says it will rent for $2000, then 0.9 x $2000 = $1800 will be the most likely rent.
That been said, the best comparable is the one you get from an Agent because they have MLS access with a lot of data that will provide you the best result.
Good luck!
NETWORTH BUILDERS5236 Reviews - Realtor · San Antonio, TX · Member since 2021 · 150 posts · 107 votes4y
Seller's are having more discussions and flexibility now when it comes to negotiation. Working into the deal a point buy down, closing credits, etc. to sweeten the deal and reduce your overhead. Ask lender's rate and terms on FHA loans/ other primary home loans to house hack multifamily. Date the rate marry the house :)
- Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes4y
@Rani Shukla. To answer your question, prices wil continue to appreciate in Texas, the expectation is 10% overall, down for the 20% from last year. And with mortgage rates increasing, a house next year will be more expensive overall than a house today. Price + mortgage= less potential for cash flow in the short term. And it depends on your financial strength as well. As always my two cents. Best wishes
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