Inventory is high, interest rates are low, many sellers are desperate, and prices are down. With all the bad news in the market, could it really be a good time to buy?
Wait a minute, what bad news? If you’re a buyer and you’re looking at the current set of circumstances, there is no bad news in this formula at all. Now is not the time to sit on the sidelines and wait.
Now is the best time to buy real estate in a generation
The most common reason given for waiting to buy is the fear that prices will continue to drop. No one knows if we have past the bottom, are at the bottom now, or are facing the bottom next year.
It doesn’t matter.
If the fundamentals of your real estate purchase are sound, the goal is not to buy at the bottom, but to buy near the bottom. It is impossible to time your way to a successful real estate purchase at the bottom of the market.
When was the last time you timed anything with success?
- Did you time getting into a relationship at just the right moment?
- Did you time that perfect job in the perfect location?
No – it is absurd when you frame timing in that context, and it is foolish to attempt to time your real estate purchases with the market cycle.
If the following fundamentals are in place for you, now is likely the right time for you and it happens to coincide with the best cycle for buyers in decades
- Are you willing and able to hold the property for a minimum of 5 years? (That means potentially renting it.) Don’t expect to get rich quick in real estate; it is a slow growth strategy that takes years. I can’t think of any extremely wealthy individuals that don’t have substantial real estate holdings. They are a vital part of your overall financial health.
- Can you afford the monthly payment? This fundamental is where most people are in trouble–their monthly payment far exceeds what they can afford. Don’t over extend yourself, err on the side of being conservative.
- Do you have a minimum of three months, preferably six months of cash reserves on hand after your purchase? Job security is an issue right now, but whether you own or rent, you need to continue to make a monthly payment for your housing obligations. Have enough cash reserves on hand so that you can sustain yourself for several months if your income suddenly stopped.
Most people will miss this opportunity
And they won’t move into a purchase until long after the market swings back up. Fear and indecision will override logic and history until clear gains are made in appreciation and overall stability. There will be opportunity then too, but the best opportunities will have past until the next buyer’s market.
The size of your opportunity, the strength of your financial portfolio, and the direction of your life is a result of the choices you make.
