“Should I Buy a House?” – How to answer this question

Deciding when to buy a house is one of the hardest steps in the home buying process, especially when the housing market is hot!

I think we all know that inventory has been ridiculously low for the last year+.  With more home buyers than home sellers it has driven prices up.  The question is, can this continue, and what is causing it.

During the pandemic home buyers realized they could work from home, which meant less commute and living closer to family.  Also the desire to get out of packed cities and head to the suburbs or even more remote places like buying a house in Big Bear started to be a driving force.  Once we added the low desire of home sellers to move during the pandemic, the bidding wars started.

Intense bidding wars are commonplace. Take one California home that got 122 offers in two days. A May Zillow report found that nearly half the homes for sale in the US are selling in under a week.

ARE LOW MORTGAGE RATES WORTH IT?

Mortgage rates are still incredibly low.  This means that you could pay LESS for a more expensive house in your monthly payment. BUT if you pay more than you want for a home, ultimately you will still have a higher monthly payment.  Set a budget and stick with it.  I know it can be disappointing to hear you didn’t get the house, but if it means you would be house poor it’s probably not worth it in the long term.

SELLERS SHOULDN’T GET OVER CONFIDENT

Higher prices are drawing some sellers to the market, to be sure. A recent survey from NerdWallet and The Harris Poll found that around 1 in 6 homeowners are planning to sell their home in the next 18 months. Among those people, 45% said that rising home prices and falling inventory has prompted them to consider selling earlier than they had originally planned.

But homeowners should exercise caution in trying to game the market, financial experts warned. “Timing the housing market is almost as difficult as timing the stock market,” said Rick Brooks, co-owner of Blankinship & Foster, a wealth advisory firm in Solana Beach, Calif.

The market will start to shift by Q4 in 2021 and early 2022 with more houses hitting the market and more choices for home buyers.

Buyers need to come in prepared — in more ways than one

As the wisdom in real estate goes, the best time to buy a home is when you need to because your life has changed. Many people opt to become homeowners after they get married or when they have children as a way to have more control over their housing costs while also building wealth.

Most of my clients have made a significant amount of equity by owning a home.  The key is to buy a home you can afford the monthly payments and then wait.  Statically the California Housing Market has similar, or higher, gains to the stock market.

If you are writing offers, do not get caught up in the emotion of trying to secure your dream home in the midst of a bidding war. Be really firm on what your house budget is.

Determine how much you can afford to spend each month on your mortgage, insurance and home maintenance. Use that to determine how much you can afford. And then — here’s the hard part — avoid looking for homes at the top end of that budget. Homes in many markets are being bid up well above asking, and if a buyer lets emotion get in the way they could set themselves up for financial trouble.

WHEN SHOULD YOU START PLANNING TO BUY A HOUSE

To be in the BEST possible position to make a decision to purchase a home, start your planning one year ahead of time.  Connect with me for a planning session.  Many people fear that a realtor will make them do something, or they are not ready to speak to a realtor.  A good realtor will set you up on a specific plan to help you decide if you want to buy a home now or wait.

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Tristen Campanella, MRSP, CBS-  

TEXT: 760-310-0166

Email: [email protected]

Tristen’s top priority is integrity and honesty.  Her valued perspective and highly personal approach has won her client’s trust.  Through her thorough, competent and experienced representation, she delivers impressive results. She is extremely attentive in providing communication about the important details of the transaction and responds quickly to her client’s needs.  She is an aggressive negotiator to ensure her clients receive the best price and terms for them. 

Tristen is proud to be recognized in the top 5% of realtors in San Diego County.  She is a Certified Military Relocation Specialist and Seller Representative Specialist. 

As a local San Diego resident, Tristen enjoys hiking with her family of 5 kids, and her golden retriever Brady, all over San Diego County. She can also be found in the yoga studio, hiking, or paddle boarding. 

Tristen will spend the time needed to truly listen to your goals and help you develop and plan to reach them.  This is more than a home, this is your life!