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Why You Shouldn't Try To Wait Out
The Market
With the leveling off of the housing market,
a new strategy has emerged from those who want to buy, but want to get
the best deal. It’s called the Waiting Game.
For some, this means waiting until home
prices fall or interest rates drop—or both—before buying. For others,
this involves selling their current house and moving into a rental until
the market starts to heat up again.
However, since it’s next to impossible to
predict the optimum time to buy, the Waiting Game might not be the
best strategy. Now may be as good of a time as any to buy a home.
With builders reporting the biggest slowdown
in new construction in the past decade, many builders are starting to
offer discounts, rebates, and extras on new homes. Incentives such as
free kitchen upgrades, closing cost breaks, and even community golf club
memberships are becoming much more common with the current market the
way it is. Two to three years ago—when the market was red-hot—such
incentives were unheard of, but now potential homebuyers have their pick
of several different options. These incentives won’t be offered forever,
so those who wait may miss out.
As for home prices and interest rates,
finding a good balance between the two is the key to buying at the
perfect time. Right now, the interest rates are leveling off and, as a
result, the median home prices are beginning to stabilize. This
combination of reasonable rates and decent prices may open a small
window of opportunity within the next 12 months for those who want to
buy. Since the home-buying process doesn’t happen overnight, the waiters
may not be able to get into the market fast enough to take advantage of
this opportunity.
For those who are thinking of taking the
more drastic step of selling their home and then renting, they might
want to think again. The rental market has been extremely hot lately
because of the high home prices we’ve seen in the last few years. In
other words, those people who haven’t been able to afford a home—and
those who are selling their homes in order to wait out the market—have
driven rents up. According to the National Association of Realtors,
rental prices are expected to increase an alarming 5.3 percent this
year. Unfortunately for many people, renting instead of buying now may
be a losing proposition in the long run.
In the end, deciding whether or not to play
the Waiting Game depends on a lot more than just builder incentives,
interest rates, and the rental prices. However, with the market being
the way it is right now, it may be wiser to buy sooner rather than
later. ∆ |
