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It’s not even close. The question I get most often is “when should I buy or sell?” Get out your crystal ball, Josh. You and everybody wants to know when the peaks and valleys are going to hit. OK. Here are my thoughts for this spring market.
Buyers:
Listen up. Buy as soon as possible. This may sound self-serving, but if you read #1 above, you’ll know you are on the cusp of the pricing bell curve rising again. The clock is ticking. The next rate improvement is likely in January or March at the latest. When (not if) that happens, there will be an influx of buyers in an already tightly inventoried market. So, I’m telling you right now, prices WILL go up as the year progresses.
But Josh, you say, interest rates are supposed to go down this year. Shouldn’t I wait to buy? To that I say “no.” Hear me out. Yes. Your rate will be higher now than in 6 months. But studies (and the math) show that buying with a higher interest rate at a lower price point is much more cost effective because you can refinance into a lower rate later.
This strategy really works. But make sure you understand it before you sign on the dotted line. You could buy down your rate, but I would tell you not to spend the money. It doesn’t pencil out in most cases.
Bottom line, don’t wait. It only takes a day or two to get pre-qualified if you are organized and diligent. Waiting will cost you money.
Sellers:
Have you been holding out waiting for rates to drop? Do you sense that tsunami of buyers about to hit the market when they do? You need to position yourself to be ready to list your house. That means putting a plan in place yesterday (well, ok, now).
The spring sales market is going to be hot. You’ll likely gain an upper hand in negotiations as the spring/year progresses. But then you have to stop and think. How long will the seller’s market last? Remember the cliff last fall? Will it happen again?
My crystal ball is a bit cloudy on this one. My gut tells me you’ll be able to get the most for your home if you sell before everyone goes on vacation for the summer. It’s not just me, other agents I have spoken with believe that we could see a drop in buyers towards the end of summer causing prices to plateau which could lead to more days on market..
On the flip side, if you look at the economics of it, our local unemployment is currently at 3.7%. People are employed and making money. That means they need homes. And low inventory has been pervasive for years. Will we hit a cliff again? If interest rates really don’t inch back up, which most don’t think they will, I believe there will still be more buyers than we have inventory – which is always good for sellers.
So, ask me again. When should I buy or sell? At this point in time (which I have not always recommended) the answer is now! Call me and let’s put a plan in place! Or reach out even to poke holes in my logic. I love a good debate!
