Ask these questions to decide if it's the right time to buy.
You’ve probably weighed your personal pros and cons before making the decision to buy a home. But what if it’s a seller’s market when you’re ready to buy? What if you’re concerned about interest rates rising? And how do you get a sense of market conditions in the first place?
Don’t panic. Timing the market and deciding when to buy a house isn’t straightforward process! But these questions are a great place to start.
#1: How do I know whether to buy now or wait?
It’s the million-dollar question (literally): Is this a good time to buy? Your first step? Ask the experts. A local real estate agent should be able to give you an opinion. Listen carefully — a good agent will have facts to back up that claim (not just a “gut feeling”).
For example, a South Florida agent might tell you that your market has seen an uptick in asking prices this year over last year. Or they’ll tell you how homes in a specific neighborhood are getting multiple offers, which might mean paying full list price if you really want to live there. That’s the hallmark of a strong agent: They’re familiar with current data and trends, and they’re willing to give you advice that’s in your best interest. Then you can use those insights to form your own opinion.
#2: How much will seasonal trends affect my results?
Almost every agent knows that — broadly speaking — homes tend to sell during the spring and summer. Most people don’t want to drive from house to house during the frigid winter months, so springtime releases pent-up demand. This continues into the summer, as families try to find new spots and settle in while kids are on summer break.
But weather doesn’t always rule the real estate calendar. There may be other neighborhood events that affect the local market, and fall and winter may be great times to find deals. Ask your agent to walk you through data that influence buying and selling behavior during different times of the year.
#3: Are 2015’s seasonal trends in line with previous years’?
Let’s take this question a step further: You’ve seen the seasonal trend data from the past few years. Will this year’s buyer/seller behavior be the same? If you’re buying in Chicago, a local agent might know that the price per square foot for homes in Chicago is rising rapidly — from September 2014 to September 2015, it rose 4.4%.
A good agent should be able to give you some historical context, commenting about whether that type of rise in asking price is “normal” relative to other summers. They may advise you — based on this year’s trends — to make decisions in a way that’s different from what they would have recommended in previous seasons.
#4: How is my price range, relative to homes on the market?
Comps are key. Ask what your price range gets you today versus what it might have gotten a year ago. In both cases, you should be looking at:
- Median prices
- Price per square foot
A good agent will tell you how your home (or your budget) relates to median prices in target neighborhoods. They’ll help you understand what trade-offs you may need to make to get what you want now, versus a few months down the road.