5 Signs To Watch For When Buying Real Estate

With a lot of uncertainty in today’s real estate market, many buyers are waiting on the sidelines wondering if right now is the best time to get into the market. Prices are dropping but with interest rates continuing to rise, it’s not so clear. Every situation is different so everyone’s timing will be different. However, below are 5 signs to watch for when buying real estate.

Stability / Income

Anyone looking to get into the market has to make sure they have a stable income and good credit. The reality is that without BOTH of these, you will not get a mortgage. With your financials and down payment amount, you will be able to determine your budget and calculate your monthly payments. Now the next question that you need to ask yourself is if you can manage for the next three to five years.

Buyer’s Market

As a buyer you want to buy in a balanced or in a buyer’s market. Since the housing demand is low, buyers can now take their time looking without any competition. You have more negotiating power as well since there is less competition and more inventory to choose from. You can tell when it is a buyer’s market when houses are taking longer to sell at the listing price.

Interest

Ideally, you would also want to buy while interest rates are low. However, the caveat here is that lower interest rates usually result in higher home prices. It’s also important to keep in mind that interest rates change but mortgage amounts don’t. Yes, higher interest rates will increase your monthly payments but there is always the possibility that the rates will come down.

Timing The Market

Try to time the market and you are likely fail. The market can change so quickly and it is hard to predict. I repeat, the perfect time to buy a home is when you find a home that you can afford, and meets your needs. You can put yourself in a bad position by waiting and trying to predict the market.

Seasons

Buying during certain times of the year may be beneficial for buyers. December and January are the best time to look for a home. The cold keeps people away because nobody wants to move in the winter. Less demand means less price action. Spring time is when we see an increase in activity as buyers want to move into a home before summer.

At the end of the day, you should buy real estate when you have your finances in order and you can find a home that you are comfortable with. Think about your goals, and see if today’s market allows you to get there. Speak with professionals that can help you develop a plan that is best for you. There are opportunities in every market but your end goal is what will ultimately help you decide when you should buy or not buy. Have your finances in order and stay ready for when your opportunity comes up.

Feature image by Avi Waxman