Do I Wait Until Prices Drop?
Believe it or not there are several reasons why it may not be a good idea to wait for house prices to drop before buying. I know what you are thinking “nice sales pitch bud.” … just hear me out.
Housing markets can be unpredictable and waiting for prices to drop may result in missing out on potential opportunities. For example, interest rates may rise, making it more expensive to borrow money for a mortgage, or a strong economy may lead to increased demand for housing, driving prices up.
When prices drop, the competition can rise
Waiting for prices to drop can also lead to increased competition for remaining available properties. As prices decrease, sellers might be less likely to list, which would shrink the available inventory as houses are taken off the market. This can make it more difficult to find a suitable property within your budget because when house prices drop, it can make it more attractive for buyers to enter the market, as properties become more affordable. This increased demand for properties can lead to more competition among buyers for available homes. (Hello Early 2022, we’re talking about you again)
Furthermore, when you wait until prices drop, it can also lead to the entry of more buyers who were previously priced out of the market, increasing the competition further. This can make it more difficult for buyers to find a suitable property within their budget, and also make it harder to negotiate good deals.
For example, if a buyer is looking for a property in a specific neighbourhood or price range, and the number of properties available in that area decreases, there will be more buyers competing for the same properties. This can drive up the prices of the remaining homes, making them less affordable.
Owning now allows for stability
Owning a home can provide benefits such as building equity, receiving tax credits, and having a stable living situation. Waiting to buy a home may mean missing out on these benefits for an extended period of time. If prices start to rise as supply gets eaten up, buyers start to get priced out of the market, forcing them to start back at square one again.
Overall, while it might seem like a smart financial decision to wait until prices drop, it’s important to consider all of the potential risks and benefits before making a decision. You will never be able to time the market, so it’s always a good idea to consult with a financial advisor or real estate agent to help you make an informed decision.
