When to Buy
Always and never. In order to answer that question, a few things should be clarified. Firstly, what is your point of origin i.e. are you buying a first property or a vacation home, are you an investor and if so, are you buying to rent or rehabbing to sell? Next, how familiar are you with the market; specifically, properties in this price bracket, the area and supply vs. demand in the current market? Probably the most important questions are, do you know what you can afford and what do you intend to spend? If, like most people, you will be using financing of some sort, now is the time to get pre-approval.
A few more questions come to mind, but these will suffice for now. The answer to the original question is this. If you are ready to buy, then there is almost always a bargain to be found somewhere. The truth about once-in-a-lifetime deals is that they actually come around more than once, you just need to have your eyes and ears open. The other answer, is that it is never the right time to buy if you are looking for the best possible time because it does not exist. Markets fluctuate and demand vs. supply changes. The best time to buy is when the market is at its lowest, but, there is no scientific way for calculating this, at least there won’t be until they invent the time machine.
Hold on, the answer is coming. Firstly, patience and research are the only real tools you have to make a good decision. A good decision is one where you make a return on your investment assuming that you will be reselling the house at some point. If you are buying a home that you will be living in it for more than 10 years, a good decision involves more than just good financial thinking. With inflation and other factors considered, buying even the most expensive house in the area can be justified to some degree, as long as you can afford it.
There is a caveat of course, marriage, kids, work, divorce and other factors may change what seemed like a permanent decision. So, approach the purchase like an investor and you will be on the safe side.
Two things seem fairly certain in real estate. They are not making more land, they are making more people. In economic terms, this means that over time, demand will always outstrip supply. In some areas this is more true than others and that is where the research comes in. Don’t be lazy. Most people spend more time buying a pair of sneakers than they do shopping for houses. Relative to price, you may want to spend a bit more effort making a good choice.
If all this seems complicated then let me boil it down. Buy when prices are low. Approach property purchases with a long term view and you will be fine. Expert investors look at shorter time frames and work with smaller margins of error.
Use common sense and don’t be afraid to ask questions. Happy hunting!
Ken Glidden at Next Door Properties is an active investor and Realtor ® in the Charlotte North Carolina area. Contact him to determine if now is a good time for you to buy.
