Buying a house—in any market—is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in.
Use a mortgage calculator to estimate your monthly housing costs based on your down payment and interest rate.
Trying to predict what might happen next year is not the best homebuying strategy. “Buyers sitting on the sidelines today in anticipation of lower prices tomorrow may end up disappointed,” says Neda Navab, President at Compass.
Navab expects home prices in some expensive markets and other areas that saw substantial price gains over the past few years may decrease somewhat, but she doesn’t expect a widespread, national price decline like that of the 2008 financial crash.
So, instead of waiting for much lower prices, buy a home based on your budget and needs. If you find a home you love in an area you love, and it also fits your budget, then chances are it might be right for you. However, if you make too many sacrifices just to get a house, you may end up with buyer’s remorse and an expensive albatross you might have to offload.
Tips for Buying in a Hot Housing Market
Start with a budget and stick with it. Even with a slight uptick in the number of homes for sale, buyers are still facing elevated prices and mortgage rates nearing 7%.
“The biggest thing right now is the disconnect between buyers and sellers,” says Rita
Tayenaka, owner of Orange County, California-based Coast to Canyon brokerage. “Buyers want to lowball, and sellers want last year’s price.”
While buyers are getting a bit more breathing room now, they should keep in mind that it’s still a seller’s market while they consider their options.
Tips for Selling in a Hot Housing Market
The first step for a successful sale is to find a listing agent who knows the area and comes highly recommended. A good agent will work closely with you to price your home competitively while fielding questions and offers from prospective buyers.
Tayenaka points to the outsize number of homes falling out of escrow recently as a cautionary tale for sellers who continue to demand 2021 prices. “Everyone thinks their house is special,” she says.
Even though the market may still be tipped in your favor, it’s in your best interest to present your home in the best possible light. Not everyone has cash dedicated to renovations and repairs, but a little sweat equity can go a long way. The first step is to declutter, organize, and clean. Even if your home is outdated, a clean space gives buyers a chance to envision the house’s potential.