Why Buy Now?

From the desk of Randy Bristol

Where did the buyers go? I can’t believe so many people that wanted to buy a house 6 months ago are now no longer in the market. Now is the buyer’s time! It is no secret that the market has drastically changed—but not necessarily for the worse. I truly believe right now is a much better time to buy than it was during the mad rush of 2021 and the beginning of 2022. So, I wanted to take a minute and share three main reasons with you to help explain how today’s buyers are getting a much better deal than the buyers of the last 6 to 18 months.

First and foremost, a lot if not most the buyers had to overpay for the houses they purchased during the past 6 to 18 months. On average people were having to pay $10,000-$30,000 more than appraised value and for some buyers they were paying as much as $75,000-$100,000 over appraised value just to win the bidding war on the house.

Second, many buyers were left buying their second, third, and fourth choice homes. It was extremely difficult for people to even buy the house that they wanted. Many buyers were left questioning whether the houses they were buying were really right for them—taking houses that didn't really fit their needs just to get a house.

Third, most buyers had to pay every cent of closing costs and could not ask for items to be repaired. The seller didn’t negotiate and for the most part did not contribute to closing cost or other fees associated with closing. It was a take it “as is” or nothing at all environment. This left the purchaser having to put money into the house after purchasing it. Creating another cash outlay.

After factoring in these considerations, were the buyers really getting a good deal? Maybe it was a good deal at the time but not the deal they can get now.

Today is a much better time to buy. Here is what I see.

First, I am not seeing people pay over appraised value for homes at this time. We are back to buyers and sellers actually negotiating on the purchase price and in a lot of cases the seller is dropping the price and making concession to facilitate the purchase.

Second, the inventory is much higher, and buyers now have an opportunity to actually find a house that fits their needs. While some houses are still going under contract quickly, I’m seeing that most buyers have the opportunity to make a timely decision. They are not feeling so rushed because the home has 21 showings and 15 offers on the table.

Third, I am also seeing seller paid closing costs come back into the market. Most contracts I’m seeing now has the seller paying some if not all of the closing cost. This is a big one. This is actually helping a lot of buyers that didn’t quite have the funds to purchase in the past now be able to afford to buy a home. It also makes up for the higher interest rate and supplements the purchaser while waiting on the rates to come down.

Yes, interest rates have increased. However, after witnessing the ebbs and flows of the housing market with my more than 30 years of experience, here is why I can tell you that right now is the right time to buy.

Interest rates will come down. Like I mentioned above, not only will buyers who buy today be able to find the right house, but it will be reasonably priced. This will mean that when they have an opportunity to refinance these rates, not only will they end up with the right, reasonably priced house, but they will have a good interest rate as well.

In many instances I tell people to just think of buying in a time such as this as a bridge loan just to get you to a better interest rate in the future. On the off chance that interest rates don't come down quickly, then the buyers are no worse off—they still will have bought at the right time, finding the house they wanted (and needed) and not overpaying for it.

If you wait for the rates to fall in order to get back in the market there is a real good chance we will be right back in the mad dash for homes that we were previously in. My father always told me that you “buy when someone wants to sell and you sell when someone wants to buy” Now is that time!

Overall, I see this is a great time for people to buy the homes they want for a reasonable price—which could not be said about the housing market just six months ago.