One of the most amazing things about the times we live in is how much information is available to us. Let’s face it, have a question, Google it, and a plethora of information will appear within seconds. There are articles, videos, infographics, blog posts, etc. covering just about any topic you can think of. It’s like being a kid in a candy store and having your head start to spin with all the choices. The challenge these days isn’t the access to information, but knowing who to believe and what to do with that information.

Just the other day I was doing some research on best practices regarding Instagram as it’s a platform that I would like to start using more. I read several articles, watched numerous videos, and in the end found myself just as confused as before I started. While there were some commonalities between the articles and videos, many of them seemed to contradict one another. The same is true with the real estate market - Now is a great time to buy, don’t buy a house now, sell your home and rent, don’t sell your home, buy an investment property, we’re in the midst of a housing bubble, we’re not in a bubble, etc.

My goal with these blog posts and videos is never to convince you of something one way or another but to help cut through all of the confusion and share the information you need to make the best decision for you.

Two questions I have received numerous times over the past couple of months have to do with whether now is a good time to buy a home and if I think a current homeowner should sell and rent for a while. Continue reading below, or watch the following video to learn more.

It’s hard to know who to trust, isn’t it? Nobody wants to be sold or feel as though they’re being taken advantage of. I’m exactly the same way. It’s especially hard when the information you’re receiving is coming from a “salesperson”. Full disclosure, I’m a salesperson, but the funny thing is I’ve never thought of myself as one. I’m not sure why because we are all salespeople in one way or another. When’s the last time you sold yourself on having dessert because you’ve been good all week, or your spouse on an idea, even if it was just where to go for dinner? How about kids, aren’t they the ultimate salespeople? When a child locks in on wanting something they just won’t take no for an answer. I bring this up because our perception of the source of the information we receive shapes how believable we think it is and how much we trust it. I guess I’ve never thought of myself as a salesperson because I don’t really think you can “sell” someone a house. A house isn’t a bottle of water or a pack of gum, but the largest financial decision the vast majority of people ever make or commit to.

I’ve been in this business fast approaching 20 years now and have seen several different real estate markets, worked for banks selling foreclosures, helped distressed homeowners complete short sales, worked with investors, helped people buy and sell investment property, etc. Every single week I spend time doing research on local and national market trends, read expert opinions, and crunch the numbers so you don’t have to. As mentioned above, the amount of information available is overwhelming and can be confusing. My goal is simply to help you cut through the clutter and present the information in a way that allows you to make the best decision for you because that is all that matters.

That being said, let’s take a look at those two questions from above;

Is Now a Good Time to Buy?

The question about whether now is a good time to buy doesn’t usually have anything to do with wanting to buy but is really about the fear of overpaying. No matter what you are buying who doesn’t want a great deal? Nobody wants to buy anything only to learn they could have paid less had they waited for 6 to 12 months.

The truth is I don’t know anyone that can answer that question with certainty. In February 2020 who could have predicted what we were about to face for the next year-plus or how the real estate market would react as a result. When the pandemic hit most of the news out there was forecasting a housing crisis. How wrong was that?

Dating back to WWII, real estate has proven to be an incredible long-term market. The market has had its ups and downs, but the long-term trend has always been positive. Unless you are a short-term fix and flip investor that is something you need to keep in mind when making a buying decision, especially as the average homeowner currently stays in their home for 9 to 10 years before selling.

People tend to buy homes based on life events- getting married, having a child, need for more space, need for less space, job relocation, etc, which usually don’t happen every year and seldom pay attention to the housing cycle.

When I bought my first house it was because I was getting married and my fiance and I wanted a place of our home. We were so excited and scared at the same time. Within a year of us moving in the market had turned and prices went down. I couldn’t have sold the house for what I paid for it. I was oblivious to it because it didn’t matter as we weren’t planning on selling any time soon. When we did eventually sell the house and move to a larger one, 8 years later, we did just fine. The market had appreciated nicely and we were sitting on a good amount of equity.

The point is the absolute best time to buy a home is when it’s the right time for you to buy a home!

With regard to the market, NO, I don’t think home prices are going to be coming down in the next couple of years and neither do leading housing experts or financial institutions. (What Are The Experts Saying About a Housing Bubble) In fact, the most likely scenario based on current information is that prices will keep rising.

It’s also worth pointing out the cost of a home is more than just the price you pay. Mortgage rates are currently near historic lows and it is widely believed they will go up over the next year. A 1% rise in the mortgage rate reduces your buying ability by 10%. For example, let’s say you are pre-approved for $500,000 at a 3% mortgage rate. If the mortgage rate increases to 4%, all else remaining the same, your pre-approved amount will drop to $450,000, and, as I mentioned above, it isn’t likely that prices will decrease over the next couple of years. In addition to not being able to afford as much house, you will also pay thousands more in interest over the life of the loan.

CLICK HERE to See the Newest Homes For Sale in Frisco and Prosper

Should I Sell Now and Rent for a Couple of Years?

Much like buyers not being sure if now is a good time to buy, the question of selling to rent is also coming from a place of fear. In this case, the fear is missing the opportunity of selling at the height of the market. That would only be true if we are actually at the height of the market. I know of a couple that did this exact thing 6 months ago and now wish they hadn’t been so quick to sell as their former home has gone up another $50,000 since they sold.

We won’t actually know if we have reached the bottom, or top, of the market until after we have. We know we hit bottom when we see prices start to go back up and have seen the top when we see sales prices start to decline.

Like with buyers, only you can make the decision that you believe is right. In an effort to help you make the best decision possible you will want to keep an eye on market data and watch the trends you see happening within your own neighborhood. Feel free to stay connected with my blog and videos where I share the latest news and insights and consider signing up for my free homeowner’s report. My homeowner’s report allows you to track the latest trends, market activity, and equity changes specific to your home.

Personally, I wouldn’t sell and get out of the market now because I don’t believe we are at the top, and even when we do see balance return to the market I think the chances of seeing a crash like we saw in 2008 are remote at best. To learn more about why I feel this way I invite you to check out some of my recent blog posts that cover topics like why prices keep rising, share expert insights, and my monthly market reports that look at the latest trends in detail.

Remember, even if you’re renting you’re paying a mortgage, just not yours! According to a recent study by the Urban Institute, it is more expensive to rent than own in 2 out of 3 counties across the country and rents continue to rise rapidly.

Currently, we are still seeing very low inventory, less than a month in Frisco and Prosper (6 months is considered balanced), multiple offers, homes going under contract within days, and new home builders with nothing to sell. Under these market conditions, prices are not going to decline. If nothing else, keep an eye on those trends to gain insight into changes in market conditions.

Bottom Line

Whether you are considering buying a home, or selling, only you can make the decision that’s best for you and your family. Everyone’s situation is unique and different. If you have questions or need someone to bounce a few ideas off, schedule a call and I’d be happy to share my insights and knowledge so you can make the best decision for you. There’s never a cost or any obligation.