Is It a Good Time to Buy a Home?
In a nutshell - Yes! It is a good time to buy a home.
We remember the news as 2018 was coming to it’s year end. The feds stated they would raise the rates in 2019 at least two times to slow down inflation. Buyers put on the brakes thinking “prices will be coming down, so let’s wait to buy a house”. Sellers got in the mind set “higher interest rates will drive down home prices, so let’s sell now” and as a result have been putting their houses up for sale. In the spring of 2019, we started seeing the inventory rising and buyers slowing down their decision to buy. Then came the tariffs causing yet more uncertainty for buyers. The needed adjustment to the rapid increase over the past few years happened this winter, so the Feds did not increase interest as predicted. Now buying activity is picking up again as buyers are able to take advantage of interest rates in the low 4’s (or high 3’s on 15 year mortgages)
To summarize, buying now is great for these reasons:
1) Inventory is higher than it has been in the past three years
2) Buyers are not as likely to compete and lose out in a multiple bid situation
3) Opportunity to negotiate price on homes that have been on the market 30 or more days.
4) Interest rates are fantastic
5) Rents are going up
6) Home ownership can be achieved with as little as 5% down
7) Many Landlords are deciding to sell and asking tenants to move out
So while many people were hoping for a huge dip in prices, buyers now seem to be satisfied with the choices of homes and low interest rates. People who have been in their starter homes for 8-10 years are seeing this as a great time to move up to something larger and are taking advantage of the small price gap between a 1,200 sq ft and a 2,800 sq ft home: $292/sq ft vs $181/ sq ft in Woodland, and $479/sq ft vs $338/sq ft in Davis. The impact of the tariffs does not impact the current inventory of resale homes whereas new construction has to absorb the additional costs for imported raw materials.
People are getting off the fence and are making the choice of home ownership instead of paying rent.