Real Estate Watch – Voak Homes
Is Now a Good Time to Buy or Sell?
Let’s dispense with the obvious: if you ask a real estate agent, it is always a good time to buy or sell – we don’t make money otherwise. But, is it a good time for you to buy or sell? Different question. In this issue, I am just going to approach this from the standpoint of your primary residence. Next issue we can look at investment property.
I’ve always believed that the main purpose of your home is to provide stability for your family. The forced saving aspect of paying off a 30-year mortgage is very valuable if you are going to be in the home long enough to make a dent in the principal and appreciation is definitely a huge plus, but prices don’t always have to go up. Over the next few years, prices should be more stable than they have been as rising interest rates both make homes more expensive to afford (pushing prices down) and limit the amount of inventory on the market (pushing prices up).
Unfortunately, if you are buying, this means that although prices may stay relatively level, the affordability will go down as rates go up. So, look for a home that will fit your needs for the next 10 to 12 years and not just the next four to five years. There isn’t much value in waiting either as the lack of inventory will prevent prices from falling much while rising rates will reduce your purchasing power. In other words, you might not be able to afford more later.
On the sales side, once again it should be about your personal and family situation. If you are looking to move down after the kids have left the nest and your next purchase will be all cash from this sale, then you have a lot of flexibility: rising rates don’t hurt cash buyers. On the other hand, if you’re thinking of selling to sit on the sidelines and wait for the crash, I think you’re making a mistake and might find yourself priced out of what you would consider an acceptable home.
Over the next few years, I would not plan on real estate rising or falling to any great degree. Focus on the best place to raise your family or live in retirement. You might just be in the house long enough to make a dent in that 30-year mortgage.
Scott Voak, MBA – Broker
CalDRE #: 01153157
16710 Bernardo Center Dr.