Housing Market: Seller’s are struggling and Buyer’s are waiting. Is that the best course of action? I don’t think so and I’ll tell you why.
Let me tell you a little about what I think is going on with the housing market today. First Covid hit and everyone was sitting at home with nothing to do except house projects. The demand for building supplies went through the roof AND at the same time people were improving their home which means it was now worth more! BUT, the cost to build a home just about doubled. This drove the price per sq foot of the new construction homes through the roof. And it’s only a matter of time before that increases the rest of the houses price per sq ft at resale. In addition, the now updated homes were a dime a dozen.
Then the interest rates dropped which opened a whole new world of buyers up to being able to buy bigger and better homes for the same monthly price they were already paying. Win-win, right? Kind-of.
It brings us to where we are today. The demand for housing inventory was SO great that it drove the prices of the homes UP to an unprecedented higher cost per square foot. And if you live in a blue collar town like Texarkana, people can’t afford to lose thousands on their home when they need to re-sell. So….people just aren’t selling. The house inventory is down, interest rates are up, and now the buyers can’t afford a fraction of a home they could just a couple years ago. It’s caused a stagnant housing market and everyone is suffering for it. Listings are sitting on the market for two to three times as long as they had, buyers are being EXTRA picky and very slow to move on making an offer. When an offer is made, it’s typically well below asking.
So, WHY is it a good time to buy right now? Because it is a BUYER’S MARKET. Buyer’s can get really good deals right now. Sure, the interest rates may be high but I feel confident they will come down. And when they do, you can refinance at the lower interest rate. It’s a WIN-WIN!
How long will it stay a Buyer’s Market? As long as the interest rates stay high, it will remain a buyer’s market. However, the MOMENT those rates drop, it will become a sellers market. Why is that? Well….alllll the buyer’s who have been sitting on the sidelines, waiting, slowly browsing at properties will become flooded with more buyers. The inventory won’t have a chance to catch up to the demand so you will have buyers fighting over properties and thus the price per sq ft will shoot up. This will leave the flood of buyers paying more for a home they could have bought for way less and then refinanced.
The best time to buy is in a recession. I know it’s scary. Buy where you are comfortable NOW and re-finance when the rates drop.
