The housing market is like an ongoing soap opera – are we in the midst of a new bubble? Is the market in slump? Mortgage rates are up. Mortgage rates are down….
I have had weeks where I submitted four offers and none of them was accepted! All the winning bids were much higher than the ‘market price’. I have had other weeks were every offer has been accepted. The market is subject to many fluctuations some global, some local, some seasonal and keeping abreast of the situation can help you make timing decisions when you have the flexibility to do that.
Several factors affect the current market
1. Is there availability: supply and demand fluctuated seasonally, but also changes long term with economic and other trends
2. Is there cheap money around: When interest rates are at all times lows, buying and selling becomes easier
3. Alternatives are more expensive: If renting a home is more expensive than buying, the demand will go up
4. Foreign Real Estate markets are higher: Many foreign nationals sell their assets abroad and use the cash to buy ‘cheaper’ assets in the U.S., i.e. markets spill-over effect.
5. Safe Investment? When interest rates are low investors can’t find SAFE investments with good returns. Real estate is viewed by many as a solid investment with good returns in the long run.
Looking at all these factors, if it looks like we are entering a bubble where there is too much money with too little inventory. What should you do?
Sellers: If you are thinking of selling your house- THIS IS THE TIME, DON’T THINK TWICE!
Buyers: This is indeed a tough market:
- Be patient.
- Think how much you want the specific house and how much it is worth for YOU.
- Be ready to act right away and come in as strong as you can!
- If you not sure you will stay in your new house for at least four to five years – don’t buy. Four to five years is the average time it takes for the cost of mortgage to break even compared to the cost of renting a house.
Need help? Contact Osnat Levy for advice.