I’ve read a very interesting opinion about the real estate market, and I love the analogy. The current real estate recovery is like a marathon. Last year, buyers and sellers sprinted out of the gates at full speed, fueled by low interest rates and affordable home prices. The press and social media were full of stories about limited housing inventories, bidding wars and multiple offers. In 2013, real estate was sexy and headline-worthy (much like me!).
As we are well into 2014, it’s clear we’ve only run the first few miles of this marathon. Last year’s excitement will surely wear off, and there will be a lot less flashy magazine covers, posts, tweets or evening news stories about real estate. Most experts predict a slower, steadier, more even “pace” this year in most of the country, even as interest rates and home values inch up.
This doesn’t mean 2014 won’t be as good a time to buy real estate. It helps to look at the bigger picture and not get caught up in the micro stats or the latest headlines. Sure, we likely won’t see interest rates as low in 2014 as we did in 2013. But to put that into perspective, interest rates were as high as 18 percent in the 1980s, yet people still bought homes.
As you approach buying a home this year, it helps to focus on the long term by keeping the following five best practices in mind. These were best practices for home buying a generation ago. And they’ll most likely still be practical when the next generation of home buyers sprints out of the gate.
Buy when you’re ready
Just because you didn’t buy last year when the market was getting hot doesn’t mean you’ve missed out. Could you have gotten in when the rates were at their lowest and values near the bottom? Sure. But were you ready to buy then? Maybe not. The main thing to remember is that you should buy a home when you can afford it, you have your financing and you’ve found a home that meets your needs. That will always be the best time to buy.
Home buying is a journey
Despite how quickly the world works today, you can’t force a home purchase. It’s not like buying a television or a laptop. A home is a much more expensive and complicated purchase. It’s where you can feel safe and calm from the outside world, a place you can customize to your needs, and where you will make lasting memories. Because of this, buying a home comes with emotional and practical implications on top of the financial ones. Remember that a home is your place to live first and an investment second. Take the time you need to find the right home.
Real estate is local
The national real estate news headlines may be about multiple offers and bidding wars. But that situation may only be relevant to one part of the country or even to just a handful of cities. Even down to certain styles of homes!
Meanwhile, the neighborhood where you want to buy a home still has distressed sales and is more of a buyers’ market.
All that really matters in real estate is what’s happening in your own community. If you’re interested in getting into the market, follow the local economy and housing markets. Get connected to a real estate agent who has “feet on the street.”
Go with your Mind and Not With Your Heart
You know your financial situation better than anyone. You know your down payment amount, credit score, amount of savings and the upper limits of what you can afford to put toward homeownership every month.
You should also speak with a mortgage lender to find out what you REALLY can afford
Stay focused on what you know, stay local, take your time and don’t let outside forces sway your decision to buy a home. A good Realtor will not pressure you, but lead you to homes you might love AND can afford. People have bought and sold homes for years, at higher prices and with higher interest rates.
If done right, you’ll be the winner of this marathon. To speak with a winning Realtor, look no further. Call, click or email and let me find you the right home.