In todays market, buying a home can often be tough for your average family. There is a lot of competition out there making it hard for a buyers to get into a home. You have the many all cash investors who are willing to pay significantly higher than the asking price. So what are home buyers to do?
Don't get caught up with any one particular home and fall in love with it. Homes are an investment and most likely the largest one we will make in our life time. Emotions are not a good tool to use in making decisions on investments. Now first thing is first, get pre approved! Then you will know what price range you should be looking in, as well as the expenses you are about to incur. Search for homes that match your criteria in terms of specific features. For example, bedrooms, bathrooms, lot size etc. Another large factor are school districts. Pick the right one and selling in the future may be easier. Pick the wrong one and selling may be slightly tougher.
When placing an offer, consider making your initial offer your highest and best. In this market, people are making initial offers at much higher levels. Look at it this way. What is the maximum price for the home and if it sold for a penny more you would be fine with losing it.
It's a tough market out there but I do not believe this will last forever. We have gained an impressive 12% y o y which will bring down affordability. Also, rates have increased to 4.5% which will also decrease affordability. Investors are well aware of these things and will eventually back off once cash has been put to work. Once they do, I believe that we should see a more normalized increase in equity y o y of 4-6%. Currently first time home buyers make up approximately 20% of the market when compared to a more normal rate of 40%. The market will be more normalized once this occurs.
So stay positive, work diligently with your agent and you should be moving into escrow soon!
Brad Harry
www.BradHarry.com
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