Is this a good time to buy or sell or wait to see where the interest rate will go ( up or down)?

Asked by Sasha, Newark, CA Mon Jul 8, 2013

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Cindy Davis, Agent, San Diego, CA
Mon Jul 8, 2013
People buy and sell homes in every single market. Honestly, the right time is when it's the right time for you, your finances, and your family. Interest rates seem to be on the rise...but bear in mind, as interest rates go up, prices often come back down and vice vera. Trying to time and guess the market is a game no one wins...not event he pros!
2 votes
Colin Robert…, , Los Angeles, CA
Tue Jul 9, 2013

It's clear that mortgage rates have bottomed, and are now trending higher. It also appears as if the recent spike in rates is settling to some degree. So hopefully rates on the 30-year hover around 4.5% from now until the end of the year. But expect them to climb higher in 2014 and beyond.

When it comes down to it, they are still very low historically, and any improvement will be mild at best. Conversely, they can move much, much higher, so the upside risk is a lot greater than the downside potential.

That being said, buying a home right now is very favorable with regard to rates, seeing that they are so low. But rates are just one piece of the pie. The decision to buy/sell/wait will depend on all types of factors beyond rates.

1 vote
Dan Tabit, Agent, Issaquah, WA
Mon Jul 8, 2013
That's a good question but not one anyone can answer with certainty. Today is for sure, tomorrow is subject to so many variables that any answer has to include, "If." If this trend continues or that event takes place... then.
Here's what I can suggest. Rates are up a little from recent historic lows. They are still fantastic when compared to the past 35-40 years. Values are up from their recent lows. Total affordability is not as good as it was last year, but still very good.
What are your reasons, besides the investment side of home ownership to consider buying? Do you need more space, a shorter commute a different floor plan? Will these needs be the same or greater in a year or two?
Are you in a position to sell? Do you have equity that you can transfer into your next home or are you upside down? (owe more than it's worth).
Discuss these things with a great local agent. We do not charge a consultation fee to go over your options and just realize, that many agents may have a bias toward selling and buying, that's how we make our living. Best of luck.
1 vote
Ruth and Per…, Agent, Los Gatos, CA
Thu Jan 2, 2014
Rates will go up for sure!!

Good luck.
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Adam Modzele…, Agent, 5107917923, CA
Tue Jul 9, 2013
Hi Sasha,

There are many good answers here. The overwhelming theme of these answers basically says. It depends on you. Nobody can predict what the market will be like but we can all predict that it will still be there if you decide to buy / sell now or later. You need to make the decision on what's best for you and your family. If you feel that buying / selling is a good idea, than do that. There are lots of people here that can help you so feel free to call and ask anyone of us, and we will be happy to talk it through with you.
0 votes
The Medford…, Agent, Fremont, CA
Tue Jul 9, 2013
I agree with those who state, “It depends upon your goals.”

• If you are moving up, then buy now before the margin for your move-up home grows even larger. As the market continues to go up, the price gap between your existing home and the new one will grow larger and larger. The longer you wait, the more money you will need to bring to the table.
• If you are moving down and own an existing home, then you can’t afford to wait until the market softens because it will suddenly be much harder to sell your existing home.
• If you are renting, there are a number of reasons to get in now:
(1) Rents are going up everywhere.
(2) You aren’t getting the tax benefits that our government provides to those who own their own homes.
(3) With current prices increasing, you may well get priced out of the market.

None of us here know how long the current market will continue to be on fire, but when it turns, it will do so – quite literally – in a single day. Then you will be facing another predicament – trying to figure out when to get in as the market decreases.

Timing the market is virtually impossible – the goal of owning a home is to have a roof over your head and affordable payments. Although it’s always fun when a home increases in value, that should never be the reason you buy – there are far more important reasons. In reality, if you find a home you like and you can afford it, then the time to buy it … is when it’s available to buy.

Here is a post that may be helpful:

How Good Is YOUR Timing? 3 Important Reasons NOT to Time the Market…
0 votes
Steven Ornel…, Agent, Fremont, CA
Mon Jul 8, 2013
Hi Sasha,

I could add my $0.02 below; however, what you really need is not more opinion but an actual "Go / No Go" decision based on your goals and current situation. To do otherwise would be a disservice to yourself and/or your family.

0 votes
John Souerbry, Agent, Fairfield, CA
Mon Jul 8, 2013
In real estate it's often said, "everything is relative." In other words, when prices go up they do so for buyers and sellers equally. If you're selling and need to buy another property to replace what you just sold, you will pay a price that is as escalated as the price of what you sold. Interest rates only have a marginal impact.
If you're asking about buying and selling for profit, the key to making money trading properties is to set up what international currency traders call an "arbitrage" ("to trade without risk"). If either you or your broker (or both) are good at negotiating deals - which is where the profit in real estate is usually made - then you should be able to sell a $1M property for $1.1M and use the profits from that sale to buy another property that is worth $1M but pay only $900K for it. The difference is used to put gas in your Bentley and build up a war chest to fund your next deal.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Mon Jul 8, 2013
If we tell you don't wait, you might think we say that because realtors get paid when we sell.

So take it from some industry observers, like this one who illustrates the cost of waiting

Trying to time the market is always a gamble. In 2011, sales were so sluggish. We encouraged people to buy while prices were low and so were interest rates. But people kept waiting for prices and rates to get even lower.

Then early 2012, the market changed to a seller's market. Wall Street Journal posted an article in April 2012 about home buyers stunned at bidding wars. They thought that it was still a buyer's market.Even then, prices were still lower than where they were at the peak, and we even saw interest rates at less than 4%.

In 2013, things are changing rapidly. Interest rates are now above 5%.

So what will it take for sellers and buyers to make their move?
0 votes
Dawn Rivera, Agent, Fremont, CA
Mon Jul 8, 2013
Hi Sasha, just wanted to add if you are planning to buy and sell this is a good time. Homes are getting multiple offers and rates are still low. So you will get a good price on your sale and good rates on your new mortgage when you buy. Good kuck! Dawn
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0 votes
Brian Ripp, Agent, Fremont, CA
Mon Jul 8, 2013
Interest rates have gone up and will likely continue. Home prices have gone and will likely continue. However, both will level off at some point - but no knows when. It is a great time to buy, inventory is getting better and all you have to do is get pre-qualified and start looking.

Sit down with your broker / agent and discuss what is available in your price, preview all the properties and if you see something you like, you should make an offer.

good luck,
0 votes
Edwin, , California
Mon Jul 8, 2013
I can tell you it have never being a better time to buy a home. and i can tell you rates are never going to be this loaw again.
0 votes
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