We beat this dead horse all too often but am beating it again because it is excellent information to share with potential buyers who may be on the homebuying sidelines for a variety of reasons.
Mansion Global recently published a column titled With Recession Fears Diminished, January Is a Smart Time to Buy.
Here are some key points:
#1 – Home prices 8.45% lower in January.
According to this Nerd Wallet article/study, January home prices are 8.45% lower on average than where they are during the peak June – August buying season.
#2 – No bidding wars.
This correlates closely to point #1 above, but the lack of buyers makes bidding wars much less likely – keeping prices lower and making the buying process much less stressful.
#3 – Low rates – right now.
Rates have recently dropped and remain extremely low once again. But, they will almost certainly go up in the near term (over the next 4 to 6 months) simply because the U.S. economy is so strong. In addition, as we mention often, any thawing of our trade issues we are having with China and other countries will likely push rates up sharply. This is because trade significantly influences economic growth and indicators of future economic growth tend to push rates up.
#4 – Recession fears abating.
There was a lot of recession talk in mid-2019 that was keeping buyers on the sidelines. But now that those fears are abating, many of those apprehensive buyers are now expected to return to the market later this year, increasing competition for homes.
#5 – Luxury market bargains.
The high-end market took it in the shorts last year, with prices dropping anywhere from 13% to 30% according to the Mansion article. The causes included excess inventory, tax law changes, and cold feet/recession concerns (all interrelated once again). But, suffice it to say that there are now a lot more bargains for high-end buyers.
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