Don't buy a home if you can't afford it

[Brandon Stone]

I see EVERY realtor on IG/ TIK TOK/ whatever; saying it's going to get more expensive to buy a home if you wait. You are a pumper.  The inventory problem has not corrected itself, so prices could continue to rise, and if there is an interest rate drop, house prices could boom. This is assuming that all things remain constant. This leads me back to my point, do not buy a house, or real-estate, if you can't afford it. If people actually start waiting for interest rates to come down, this will help bring the inventory back up. Additionally, I could potentially see tons of people defaulting on their mortgages if they continue to buy places they cannot afford. I see this as the only way we move into a recession. Please do not FOMO into deals, as this could cause much market pressures. Take your time, wait for rates to drop, and inventory will begin to come back if we take this attitude as a collective. If you can afford to keep buying, be my guest! Now is not the time to gamble though. Save money, live comfortably, and wait for your moment.

Thoughts? 

[Scott E.]

Quote from @Brandon Stone:

Quote from @Scott E.:

Sounds like you have a crystal ball. I'm jealous. I could do a lot with one of those things. 

 Im just thinking and trying to be proactive. I think its more of having a contrarian mindset. I remember trading stocks 1.5/2 years ago thinking that I was the best trader of all time, only to finish the year negative lol. Nobody has a crystal ball, but I think what I said makes a lot of sense from a macro economic perspective. Whats your take on things?

I think that nobody has a way of forecasting what the future holds in the real estate market. Nobody knows where things will be in 3 months, 6 months, 12 months, 18 months. Not even the most skilled economists or biggest hedge funds out there. It is literally impossible to forecast with any degree of accuracy.

That being said, you asked for my take on things so I'll throw it out there (although to re-iterate, my opinion is meaningless). I think that 18-24 months ago there was a large pool of buyers who were sitting on the sidelines waiting for prices to come down. And now that pool of buyers has ballooned even further, because nowadays you have that same pool of buyers from 18 months ago PLUS an additional pool buyers who are ready to purchase, but this time everybody is waiting for rates to come down. Not to mention all of the inventory issues that we had back then are even worse today. If I had to guess, if/when rates go down, prices will go up. Which means that now might be a good time to buy a residential property. I'd rather buy a deal now and refinance later than wait for lower rates only to pay more for the house.

I can't help but look back to 2011 when I bought my first house (and the dozens of deals I've done since then). There have always been people trying to push a narrative based on their view of the economic conditions that it was a bad time to buy in 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and now 2023.

If you have strict underwriting criteria, you're in the right market, you buy deals under market value, and you deeply understand your sub-market, it is my opinion that it is never a bad time to buy.