Is it worth it to wait?

There’s no day like closing day!

The busy summer market is winding down. In Columbus, supply of housing is quite high right now, which means that buyers can be choosier and negotiate for better prices. Seems like a good situation for buyers, right? 

Sure. But also, many buyers are hesitating. There is no shortage of uncertainty right now, globally and nationally. Cost of living is higher, interest rates have ticked up in the last couple months, and lots of folks I’m talking to are feeling content to hold off on a purchase. I’m not a pressure guy, but I don’t advocate waiting on a real estate purchase.

Here are three reasons to make a move this fall. 

Owning real estate is key to building wealth. 

Having a sellable asset that is likely to appreciate is the surest way to build actual and tangible wealth. And not all types of property appreciate, historically; cars don’t, unless they are collectors’ items (or a 2000’s era Toyota truck.) Baseball cards do, sometimes, but personally I prefer something with more utilitarian value. And then there’s the stock market. I’m a longtime participant in that market and our portfolio has grown a LOT. But there is a lot of whimsy with the stock market; traders buy and sell based on consumer sentiment, global geopolitics, and moves made in boardrooms. I wouldn’t stay out of the stock market and I also wouldn’t make it your only source of wealth. 

Not only do property values tend to increase over time, so, too, does your equity, or share of that wealth, when you make payments on time and over time. If one can pay a little extra on the loan principal (that’s the amount you actually owe), that equity will grow even faster. 

No one can see the future, but there’s no question that real estate follows the Law of Scarcity– there is only so much land on Earth that is habitable. Such limited commodities tend to go up in value over time.

There’s no substitute for time in the market. 

Listen, good times will come and go. Tough times pass, tough people stick around. But waiting for the time to buy to improve is like waiting for an avocado to ripen. There will be a perfect day to eat it. The next day, it’s going to be less perfect, but still decent. But a couple days beyond that, it’s all over. Not a perfect analogy, but like avocados, waiting to buy real estate can leave you feeling rotten.

There are a lot of people out there that bought in 2020/ 2021 when rates were rock bottom. My wife and I are among them. They don’t want to sell, and they shouldn’t yet because it’s only been 5-6 years. They should hang on a little longer unless there is a compelling or urgent reason to move. They won’t be able to buy as much house at today’s rate. But keep in mind that even a fixed interest rate doesn’t have to be forever; refinancing a rate is always an option. It’s not free, but it can help you grow equity faster as needed. 

I always cringe when I hear folks say, “we want to rent for one more year. We’ll be more ready then.” I’m not saying that’s not true; it may be. But it may not be. You should check with a lender before you conclude you’re not ready. You might be surprised. Banks want to loan you money because it’s how they make money. They’ll sweeten the deal for you with incentives, especially for first time buyers. Some buyers leave closing with a check in their hand from the incentives. 

Sellers are ready to make a deal.

Every seller’s situation is different, but in general, when inventory is high, sellers are more likely to offer extra incentives such as closing cost help, allowances towards repairs or upgrades, and lower sales prices. Every once in a while a seller can be offended by an offer lower than they’d like. But hey, it’s not personal; it’s business. Right now, in this buyer’s market, homes are selling at around 95% of the asking price or less. There is nothing to gain from worrying about hurting someone’s feelings by NOT making an offer on the property they want to sell. They may say “no”, and they have every right to. If they do, you just move on. 

I bought my first house in 1999 for $72,000. My realtor at the time told me that as long as I stayed in it for 5 years or more I would end up making money on the house. I ignored that advice and we sold it 2002 and made enough to buy ourselves a small patio set for the new house. 

But that’s ok, because we needed a new house. My wife and I were starting a family back then. Our second house cost us $156,000 and I honestly was in a state of complete panic about how much money that felt like. It really was a lot of money back then, but we believed in the area and the resale potential. It sold in 2021 for $280,000. That sale price allowed us to buy what I would consider a “dream house” on The Lagoons, and mind you, I don’t mean dream house because it was move-in-ready. It was a major fixer upper and we are still chipping away at projects. Still, I pinch myself when I sit on our back patio and look out at the water. It’s a dream come true. 

Honestly, all of those purchases were great moves. Each one helped us get where we are now. 

The housing market is always changing. That makes it interesting, a little wacky, and occasionally stressful. There’s a lot of overthinking that happens when it comes to buying real estate. Do your homework, sure. And get some advice. From a realtor. Like me, for example. And a lender. And then, get busy building long- term wealth.