Ever since I started my real estate broker career, many people have asked me if it's right to buy a house now.
So, here I would like to summarize my thought about the best timing for buying a home based on my investment and realtor experience.
In fact, the answer to the question "Is this a good time to buy a house?" can be different in the following two cases.
1. In the case of "The house you would like to buy is the house of your dreams"
There are neither good times nor bad times.
The biggest difference between real estate and other merchandise is the uniqueness (or scarcity). In other words, there is no other same home in the world. So, if you've found a perfect home, the best time to buy a house is when it's available for you because again, there is no other same house in the world.
2. Then, when is a good time to buy a house if you are considering your home buying an investment?
On the other hand, there are clients who are caring about the future monetary value of a house because "the house you're buying now is probably the biggest investment in your lifetime." For the same reason (as far as I believe), all realtors are working hard to analyze the market properly, review the annual economic forecast, and do other things to fulfill customers’ needs.
In this case, the answer is to buy when the market falls to the bottom. Is it too simple? However, it's not easy to predict the real estate market. Like there is no other house same as yours, there is no other market the same as where you want to buy. And the “market” I am talking about can be small as few blocks to the same elementary school feeding boundary. And even in the same “market”, there can be many different markets based on the types of house, price range, etc. So, when you are planning to buy a house in a certain “market”, you must not see the micro but macro. For example, when the subprime mortgage event occurs, the decline in the average national house price was about 19% as shown in the graph above according to Census data (source: https://fred.stlouisfed.org/series/MSPUS). However, in Nevada, Florida there are certain areas and price ranges that are severely dropped by more than 40%, while there are several areas and price ranges that are less than 10% in Illinois where I am.
Therefore, to figure out when is the good timing to buy a house, your question must include the following elements. In that way, your real estate agent can analyze the market in multi-angles and provides you more precise analysis or more meaningful answer about the best timing of home purchasing.
- Location (the maximum boundary should be an area that feeds the same high school).
- Price range
- Type of house
- Size of a house
However, none of the brokers have a crystal ball, and on the other hand, there are many customers who have really good analysis power.
So, in the next blog, I will briefly write what I think will help customers analyze a market by themselves.
