Should Buyers Wait?
As real estate professionals, we often find ourselves trying to calm the fears and frustrations of weary buyers who are wondering if waiting for a more balanced market might be a better way to go.
Many states like Texas are seeing record low inventories coupled with a steady influx of deep pocket buyers. Buyers who are willing in many cases to pay tens of thousands over the appraised value. Finance buyers especially, FHA and VA buyers are having a difficult time competing for homes. Winning the contract has never been this challenging. The question becomes, why not wait until there’s more inventory?
The answer is simple: money. With interest rates hovering just below 3% and homes continuing to appreciate in value, there is a very real cost to waiting. A first time home buyer who qualifies to purchase a $300k house at 3% will qualify for less house at 3.5% or 4% interest. And, with an annual appreciation of 12%, that same $300k house is worth $336k this time next year. Less affordability and higher prices are reasons enough to brave the stiff competition and stay the course in today’s inventory starved market.
Debbie Remington is broker-owner of Remington Team Realty, LLC., and is the inventor of the mobile app Real Estate Mentor (myrementorapp.com).