Why Now is the Right Time to Buy Real Estate

The current state of the real estate market is very uncertain. The market has been, let’s say, sluggish for a while now. No one can control where the market goes, but staying informed and up-to-date on what's happening in the market is always important.

 Things are not all as they seem. In fact, now is the right time to buy real estate. Let’s dive into what’s happening in the market and what the best course of action for buyers is. 

 Not Slowing Down, Just Settling

After riding wave after wave of market highs, it’s easy to understand why people think real estate is crashing. The reality is we’re not seeing a bubble popping or a market collapse. We’re just seeing things come back down to “normal.” 

A lot of people entered the real estate space from 2018 through 2021. So far, it’s been nothing but gains. Now, the dust is settling. Home prices are still rising, just not at the same level they previously were. At this point, buyers need to accept the rates we’re seeing and work with them.

The best practice for business right now is to let go of the past. If you find yourself saying, “Oh, I remember how back in 2018…” then stop and readjust. Focus on what’s happening in the present and set yourself up for profit in the future. 

Be Aware of the Dropping Inventory Rates

One fascinating thing we see in the market is that demand is much higher than supply. Looking at inventory levels, there is a rate drop of 17.5% year over year (including both single-family and multifamily). 

According to the Census Bureau, demand needs between 1.6 to 1.7 million households annually. However, when it comes to physical housing completions, we’re only building at a rate of around 1 million single-family homes per year. So, in essence, we’re short 700,000 houses from serving market demand.

Let’s add that to the fact that people are now less willing to sell due to rising interest rates and lowering mobility rates. I’m not forecasting bidding wars, but I believe we need to prepare for inventory wars. 

Here’s where that ties into buying now. 

Why Now is Still the Right Time to Buy

If inventory continues to be in a deficit, home prices will eventually go up. Interest rates might slow that process down a little, but we’ll still see prices climb. If you accept interest rates for what they are, then the best thought process is to buy now and hope to refinance later. 

Remember, Interest rates will eventually come down. The thing is, housing prices will have gotten higher. You may find yourself in a position where you want to buy now that interest rates are down, but houses are at a higher price than if you were to dive in now. 

You also must remember that when interest rates come down, people will be willing to spend more. If the inventory remains a problem, we may start to see bidding wars drive housing prices even higher and people inclined to buy at those prices. 

At the moment, buyers have more negotiation power than they’ve had in several years. If you leverage the opportunity to negotiate an excellent deal, and interest rates come down (say to 4.5%), you’re sitting on a really good investment.

Final Thoughts

Buyers and investors can’t sit this one out on the sidelines. There is still too much opportunity in the market to sit on your hands. Rather than paying more for the same home during a bidding war, getting in now is still the best option.

As for all of the doubt and the noise, just breathe. What we see here is not a collapse; it’s a return to normality. We can’t control where the market heads, but we can digest the facts and plan our next moves to achieve the most successful outcomes possible.