When Is A Good Time To Buy A House?
There are several variables that come in to play when one attempts to identify the best time to buy a house. Ultimately, when buying to occupy, one’s own personal motivations and conditions will likely exceed any current outside market factors.
Regardless, I have attempted to provide an in-depth answer to one that usually receives a flippant answer from real estate professionals who have a bias towards encouraging you to move (NOW).
- Ideal Market Conditions – I would think that the best market conditions for a prospective buyer would be a situation where the near-term future is well-defined and the likelihood of real estate appreciation is solid. For Tallahassee, the near-term future is not crystal clear, as the next Florida Governor will be elected in November, and we can expect a change, even if the new Governor comes from the same party and political beliefs. Regardless, though foggy, I think any new Governor will have a positive effect on the Tallahassee real estate market, as our current one has pushed for massive cuts in State government. Growth in government jobs will likely impact Tallahassee very positively, increasing demand for housing and accelerating our current rate of appreciation. When you combine the likely growth in demand with the current shortage of supply, it looks pretty convincing that our local appreciation rate will continue to grow until the supply side is addressed. Ultimately, I believe that market conditions are poised for greater-than-historically-normal appreciation rates for the foreseeable future.
- Time Factors – Everybody has their own unique set of circumstances, and one big variable is time. Exactly how long do you plan on living in the next home that you occupy? This is important to consider because there are costs associated with buying a house that do not apply when one decides to rent a house. These “closing costs” are paid when you buy, and they are paid when you sell, so if you want to recoup those costs, you have to live in a home long enough for the home to appreciate beyond those costs. As a general rule, if you buy a home and move within 3 years, you will very likely NOT recover all of your closing costs. Again, though not the only factor one should consider, you should certainly discuss these costs with a real estate expert before you purchase so that you can gain an understanding of your likely “break-even” time frame when buying a home (versus renting).
- Personal Situation – This final category is a bit of a “catch all” to address the other issues that will impact your decision to buy a house (or rent) today. You might like to have more control over what you can do with your property (such as painting, floor coverings, appliances, etc.), so buying a home will be more to your liking. On the other hand, you might like the thought of having nothing to do with the maintenance and upkeep of a home, so renting might be your best option. The fact is, there are many personal factors that you should consider before deciding whether or not to buy a house right now, and a great real estate buyer’s agent will help walk you through each of them so that you can make a sound decision.