WHO Should buy a home in 2021 (AND) Who should wait…a real estate broker review …. #65

#realtor #realestatetips #homebuying

There was an article I came across today and I wanted to go over it for you..add my .02 cents

Subscribe Here https://www.youtube.com/c/Deerwoodrealtystl

Pros of buying a house now

1. Low interest rates. I agree. The interest rates have been low now for at least a year.
2. Rising home values create equity. This one, not so much. So can the market go higher? Yes When can it go higher? We don’t know. But in 07, people bought houses believing the prices were going to go up forever…and they didn’t. I would say, if you are buying today, you have to live in your house for a while before you see any equity. Therefore, if you know you are moving in a year, buying a home in this market is NOT for you.
3. Plenty of mortgage options. OK. There are thousands of mortgage options pretty much any time. There’s no reason to buy a house today because there are a lot of options…there will still be a lot of options tomorrow, and forever. This is not a reason to buy a house.

Cons of buying a house in 2021

1. Low inventory. This is true. Low inventory causes higher prices.
2. Competition from cash buyers. This may be true, but I don’t see it as a con. If you bid more for a house, you may get it. If it doesn’t appraise, you can still bring cash to the table to cover the difference.
3. Tougher mortgage standards. I have not run across this. If a buyer is qualified, they will be able to buy a house. That is, they have proof of income and their income to debt ratio is in line. As far as sellers less likely to accept FHA and VA loans, that’s on them. I always look at it as bring your offer, and worry about the details later.

Should you rent instead?

Yesterday I had a buyer’s mom say that she should rent vs buy. I thought it curious because the lady is a property manager for a large apartment complex. She has risen rents on her units over the past couple of months to the point where it would be cheaper to buy than rent. When you rent, there is no equity built. That’s reason enough alone to buy. UNLESS, you are planning on moving for a job or you expect your life to dramatically change over the next year. Then rent…but don’t rent at the top of your budget, save for a bigger down payment on your home.

Who should buy a house now?
• Have the budget to pay above asking price, which is often required to win a bidding war…. This is true, but this is always true
• Are able to pay cash for their home purchase…. No. if you have strong credit, solid job, no need to have cash to pay 100%
• Live in an area where homebuying demand is low and prices are more manageable…I don’t know where that would be.
• Are working from home and have the flexibility to move to a lower-cost housing market….I don’t know where a lower cost housing market would be. I checked out rural property the other day and it’s pricey everywhere.
• Are willing to consider distressed properties (not move-in ready ones) that may need a little more work….So, this is a strategy that many use regardless of the current market.

Who should wait?

• You’d need to really stretch your budget to afford today’s prices…this is true in any market. Assume that you require a 3/2 home in a particular area. Let’s say your max budget is 200k and the cheapest 3/2 available just sold for 250k. It’s not going to work.
• You’d have to buy a home that doesn’t meet your needs or would require too much sacrifice due to price….Of course, but isn’t this the same as the first wait?
• You can’t qualify for a good mortgage rate, which would mean paying even more for your home in the long run…if you can’t qualify for a good mortgage rate, you might still want to buy now and then refinance when your situation improves. Are low rates here forever? No one knows.
• The market you want to buy in is particularly hot or competitive, meaning it’d be very hard to find a home you can afford….but this is true in any market. There are always going to be homes you can afford and others you can’t.

My Thoughts

If you feel like now is the right time to go buy a house…get out there and make it happen. If you feel like it’s not the right time, don’t. There are many people locked up right now where they could and do want to sell their house, but the house they would buy doesn’t offer as much as their current home and it actually costs more.

If you are googling whether or not it is a good time to buy a house…I wonder if that is the wrong question. Perhaps take the step to inquire with a mortgage company or talk to a real estate agent. IF either of them are good, you will get a pretty good sense of what to do in this market.

Our word of the day is propitious

giving or indicating a good chance of success; favorable.

Is now the propitious time to buy a home?

Source: https://themortgagereports.com/78116/should-i-buy-a-house-now-2021

Podcast call in number = 314-274-3964
media@deerwoodrealtystl.com