Is it still the good time to buy in this market? I have been asked this question so many times
recently.
We are going to enter the winter season. Some people think
that the real estate market is going to be the same ‘ cold ‘ and may be
‘frozen’ as said by some of the media . People always forget that the real
estate is cyclical in nature; its price will not always go up or never ever
just dip down. However in the long run, the property value always appreciates.
Real estate is the most practical and common means to build up one’s own
wealth, and a more secure and safety investment for average people.To get the best possible deal, some people try to time the market relentlessly. It is virtually hard to time the market; the buyers who sit on the fence for years waiting for the big drop find themselves still waiting on the same spot. They are just too scared to make the decision even the price really drops in the aftereffect moment, like the time in 2008 during the financial crises, those home buyers who made the purchase have had the average home value increased by 30-50 % easily. Those who didn’t may just still keep paying their landlord and complaining that the price is too high year after year.
Time has tested that when people look back, they always find
the home price so cheap back to 10 – 20 years ago but the buyers in that period
of time also find the price mostly too high to afford. It is really hard to time the market at the
rock bottom or high peak, however there is some moment of time in the year that
the buyer can get the benefit by acting in time, of which the right time is the
winter time.
It comes to be truer in this winter particularly and some
obvious benefits can be listed as followings:
1.
The market become slow, you don’t need to bid
over with multiple, several to ten or even twenty other buyers on the same
house and find yourself being banned and frustrated.
2.
The seller is more apt to reasonable price and
motivated to sell
3.
Not many buyer compete with you, and you may
come across a great deal
4.
The weather
may be not so pretty looking than the other season period, but that allows you more time to hunt for
your dream home because less of buyer
coming out to do the same.
5.
The market slowing down after a crazy price escalating is a normal pause and it is not a sky falling
or market collapse , on contrary it is a
platform base for further build up on next wave as long as the fuel is
still there. So take advantage of the moment to achieve the pride of home ownership
and being proud of it if it is your goal.
6.
The mortgage rate is still crazy low. To keep it
being low to fuel the economical power is the policy that the government will
not and cannot get rid of it abruptly in the near future. By the same time of the tightened mortgage
rule, the government is making the real estate to grow in a healthy way and the
real estate will not crash as some doomsayer stated.
7.
Take advantage of the low mortgage rate when you
are qualified. An increase of half point
of interest rate will reduce your buying power at least 5.5 %, or you will
qualify less $26k on the purchase of the home based on $500k home. If you wait
for price to decline, the perceived value can be lost due to higher rate.
Ironically you may not be able to afford to buy even the price declines.
In conclusion, the buying frenzy of multiple biding is
basically over in the moment. The dust has settled and buyer has a normal
amount of breathing room to hunt for their dream home. Take up the advantage right now before it is
too late.
For further discussion, please contact Dennis Ho,
Broker email: deho@trebnet.com
Homelife Gold Pacific Realty Inc., Brokerage. Independently
owned and operated.
This is not meant to interfere representation or agency
under contract with other Brokerage.
This article is not intended to be formal advice of any
kind. No one should act, or refrain from acting, based solely upon this or any
other general information without first seeking appropriate professional advice
