If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.
Ask yourself the following three questions to help determine if now is a good time for you to buy in today’s market.
1. Why am I buying a home in the first place?
This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.
For example, a study by realtor.com found that “73% said buying in a good school district was “important” in their search.”
This report supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:
- A good place to raise children and provide them with a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.
2. Where are home values headed?
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in February (the latest data available) was $249,500. This is up 3.6% from last year. The increase also marks the 84th consecutive month with year-over-year gains.
Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it.
What does that mean to you?
Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.
Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.
Start Your Home Search:
Are you ready to start searching for your Denver area home? It’s a great time, we have more inventory than we did the past few years. I encourage you to explore homes currently on the market to get a feel for the types of homes, locations, and price points. My Denver real estate blog has loads of useful information for home buyers trying to figure out what they want to do. And of course, please call me, or send me an email / text, to discuss your next home and the buying process.
Also, if you are considering new construction, remember the builder’s real estate agent represents their best interest, not yours. There is no cost for you to have an agent represent you. In fact, I may be able to help you save money and negotiate for extras which the builder may not let you know about.
Considering Selling Your Home?
If you are looking to sell your home in the Denver area, I encourage you to work with a real estate agent who has the experience and knowledge to provide an accurate market comparison so you can determine the right asking price. The market is more balanced now and your asking price is an important component of your selling strategy. Contact me today to learn how your home stacks up against the competition and how we can position your property to sell quickly and for a fair price.