There are so many would-be buyers who are still searching for that first starter or perfect home. There are those who have lost out in multiple bidding wars. There are others who passed up on homes that just maybe they should have purchased. And then there are some who are so picky that they may be lifelong shoppers and never pull the trigger at all as they search for their elusive dream home.
Let me be very candid and upfront with you. If you are financially capable in the current market to be able to buy, then maybe being more flexible with your wish list and trade-offs will make it easier to find that home.
I know some of you have been less choosy but still lost out on other homes to an insane bidding war, where people were upping the ante to $25,000, $50,000 or even $100,000 above the asking price. I also hope that with those sale prices, they will be staying in those homes for at least 15-20 years.
I do understand that homes that are priced from $500,000 to $750,000 have still slipped through your fingers and frustration and disgust set in. You then decide “what’s the point of continuing to search and look for a home?” The answer is persistence, fortitude and one never should give up for “winners never quit and quitters never win.”
Always try to keep in mind not to go overboard and get too emotional with your purchase. Try to stay within your budget while keeping limitations as to your monthly expenditures. According to Bankrate.com, the cost of financing a 30-year fixed mortgage APR is 7.54%,as of Sept. 4. The average 15-year fixed mortgage APR is 6.83%. Before putting offers in with your Broker, ask for comparable sales to know what the prices are in that area for similar homes that had recently closed.
In the next few years, some will lose their jobs and fail in their businesses. One must look carefully at your job and the strength of your business to determine the value of your position, profitability and whether layoffs will be on the horizon, possibly affected by AI. Will your company be a take-over candidate or will your business struggle to survive?
Foreclosures and short sales will slowly come about as the business climate changes. However, due to the fact that this time around compared to the 2008 recession, more than 65% of homeowners have substantial equity in their homes and are in a strong financial position, and will most likely stay that way. Until housing inventory normalizes to six to seven months, which may take several years, values should remain strong.
Most importantly, until interest rates come down, those wishing to move up or even downsize will stay put and not give up their refinanced historically lower rates which has accelerated the historic lack of inventory.
There are some who can cash out now and pay outright for their next purchase, but that isn’t the majority of homeowners. The only way that prices would moderate further and values decline outside of a major cataclysmic event would be if demand were to drastically decrease and stay that way for a long period of time. Will we have a soft landing, a hard landing or will it be worse? There are various predictions as to the outcome.
But one thing is extremely clear. When excessive money is created and placed into the market, inflation occurs (also increasing the value of homes) as we have been experiencing and a recession follows, which hasn’t yet clearly occurred. Unfortunately, in the past, the only way we’ve learned how to alleviate this problem was to raise interest rates to curtail spending, which isn’t exactly happening either.
All that extra PPP and EIDL money that was handed out by the government has most likely been spent, but now we have seen consumer debt accelerate to the highest ever this past February.
You must look carefully at your personal situation and ascertain whether staying in a rental is more beneficial for you financially than purchasing. Analyzing what you are providing your landlord (appreciation, tax deductions, increasing your rent, decreasing your wealth on a monthly basis, and the power not to renew your lease) in comparison to the cost of ownership.
Obviously, on Long Island the cost of ownership might be too great for those on the borderline of affordability; that’s why we are losing our population. In other parts of the country where the cost of living and lower or non-existent state taxes are, buying still makes sense. But if it comes down to just buying something for those who can, stick it out because the fall and winter might just provide you with a better opportunity when demand historically lessens.
Instead of a house, consider a condo or an affordable co-op that has strong financials. Either way, trade-offs should be considered for the long term as it will be in your best interest and to your greater advantage to be your own landlord.
Consider contributing to those who lost everything in the devastating fires on Maui, Hawaii: www.gofundme.com/manage/help-the-tragedy-in-maui-in-anyway-that-you-can
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S.) and in 2022 has earned his National Association of Realtors “Green Industry designation for eco-friendly construction. He will provide you with “free” regular updates of sold and new homes in your town via the Multiple Listing Service of Long Island (MLSLI) or go to WWW.Li-RealEstate.Com and you can “do it yourself (DYI) and search on your own. For a “FREE” `15 minute consultation, as well as well as a “FREE printout or digital value analysis of what your home might sell for in today’s market without any obligation or “strings” attached. He can also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality, and our Seller’s and Buyer’s Guides for “Things to Consider when Selling, investing or Purchasing your Home.
You can email or snail mail (regular mail) him with your request or ideas, suggestions or interview you for a specific topic and a Q & A for a future column with your name, email and cell number. He will email or call you back and respond to your request ASAP as long as he has your complete name, cell, email and/or full home or business address. Again, for a “FREE” 15 minute consultation, he can also be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions and concerns in selling, investing, purchasing, or leasing residential or commercial property.