The Chill Factor:In contrast to the red-hot pandemic housing market, the current scenario is marked by a noticeable cold spell. Home sales have hit their slowest pace since 2008, and buyers who recently committed to purchase contracts are reconsidering their decisions. The vice president of investments at Opendoor, Amit Arora, aptly points out that in these times, the "best time to buy is your time."
Adapting to the Climate. While the real estate climate may be frosty, life goes on, and many buyers can't afford to wait for the "perfect time to buy."
Buying in the Frosty Market:
In a market with limited options, flexibility is key. Distinguish between your non-negotiable needs and your "nice-to-haves." Having a clear list allows you to act swiftly when the right opportunity arises. Creating a shopping list (and agreeing it with any spouse or partner you’re buying with!) is a simple and effective way to start prioritising what really matters so you can find that home of your dreams.
Start with creating a list of all the things you can think of, such as extra rooms, parking, office space, and outside space. Then rate them from need (a must-have) to different levels of nice to haves. For example, a big want means a potential home with this item would make a difference and not having it might impact how you feel long-term.
Research various neighbourhoods, gauge buyer interest, and understand the current inventory. Don't limit yourself to a specific area; sometimes, hidden gems are found in less competitive markets. It's about being flexible throughout the homebuying process and considering options you may not initially believe will work.
If you're a first-time homebuyer, a seasoned real estate agent can provide invaluable insights. They know the market's pulse, can identify off-market opportunities, and guide you through the complexities. Try working with a buyers agent - someone who is there to help you find the right place and negotiate for you. A new startup called First In The Door is a fantastic resource for this!
With mortgage rates at 21-year highs, affordability goes beyond home prices. Utilize a mortgage calculator to estimate monthly payments, considering different loan amounts and rates. Plan for the unexpected and avoid depending on future refinancing. Mortgage rates are expected to ease eventually, but no one knows when rates will decrease or by how much, so it’s important not to depend on refinancing for affordability. Make sure you discuss with professionals exactly what your options are. Being pre-approved always puts you in a better standing when negotiating on a home.
In challenging markets, creativity pays off. Explore various mortgage lenders, consider unconventional financing options, and don't dismiss homes that have lingered on the market. Sometimes, these homes offer hidden value or more motivated sellers. Think about how much work you may be willing to do to turn a purchase into a home. Seeing past the decor or the layout, you might find something very special.
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