Market Timing: Should You Buy a House Now or Wait?

Market Timing: Should You Buy a House Now or Wait?

When was the last time you thought about buying something but weren’t sure if you should?  

Did you have any warning signs firing off in your mind, like the 4th of July?  Or did you dive in headfirst only later to regret the decision you just made?

Ok, I can’t speak for you, but I confess.  I have committed the sin of diving in without thinking things through 100%. 

Like, when I bought a super fancy car before I turned 40…  I still don’t know what I was thinking.  Maybe I was having a mid-life crisis?  I’m not sure.  Here we are a couple of years later, and every time I pull into a gas station, I’m quickly reminded of how much I wish I would’ve slowed down to think it through.

So, if you have warning signs firing off in your mind, like the 4th of July, about should buy a house in today’s market?  That’s ok, and in fact, it’s a good thing.  It’ll help you think things through as you move forward.

Obviously, buying a home is much different than buying a car – no matter how nice the vehicle might be. 

But the result can be the same if you don’t think through your decision.  It can lead to buyer remorse, aka regret. 

72% of Homebuyers Regret Buying a House

CNBC reports that a study by Clever Real Estate found that 72% of homebuyers regret buying a house between 2021-2022.  

The report says, “the number one reason for the buyer’s remorse: 30% of respondents said they spent too much money.”

Indeed, in 2021 and early 2022, many homes were in prime bidding wars, with buyers ratcheting the price significantly in desperation just to win the bid. 

“The second most common regret was rushing the home-buying process, with 30% saying their purchase decision was rushed and 26% indicating they bought too quickly.”

Indeed, the pace was so fast from 2021- early 2022 You could blink your eye one moment and see a new listing, blink again, and it was already under contract.  It was insane!  

Buyer’s taking time to form a winning game plan with their agents is what likely separates the 72% of buyers that have regrets vs. the 28% that don’t.  

So, what can we learn from this? 

To never buy a house?  Or perhaps, it’s wise to learn and consider our options before making a major life decision.

Now, please correct me if I’m wrong here.  I think most people want to make wise decisions that are right for them. 

But when they research it, they get so many mixed signals.  Like this post from Yahoo Finance, that quoted a “housing expert” saying, “this might be the worst time you can buy.”   

But is it really the worst time?  The only one that really knows the answer to that question is you.  In a moment, I’ll show you why your voice is the only one that matters when the noise fades away. 

But for now, consider the points of view in this post from Realtor .com titled, “Is it the single worst time to buy real estate in history?” The answer might surprise you. 

In the post, they shared several thoughts from people posting on the Real Estate subreddit on Reddit .com  

The burning comment that ignited the firestorm of statements is, “I was just told it’s the single worst time to buy real estate in U.S. History. How far off are they?” 

One person said, “that person wasn’t alive in 2007, I guess.”

Another one said, “Wouldn’t everybody thinking it’s the worst time to buy actually make it the best time to buy?”

And another commenter lays their heart out when they say, “I mean, maybe.  But if the adage ‘the best time to buy is when you can buy,” then no, at least not for me.  We tried very hard. We just didn’t have $100k in cash we could offer over asking.  But I can currently buy a single-family home in my area where a year ago that was not true.  Now is the first time I’ve been in a position where I have enough of a down payment, enough of a salary, and enough options to actually buy a home.” 

Sometimes, we can see things from another perspective by looking at subreddits or simply listening to what people say. 

Doing so can help us shut down distractions and consider our options from a holistic viewpoint.  So when we take a breath to assess the situation, we can focus on the most important voice of all…. Our own voice.

That’s where the 3 questions I’m about to share with you can be very insightful if you let them.  

Something powerful happens when we just breathe and focus on finding our Zen within.  We can gain clarity and understanding.  

3 Questions for "How do I know if I'm Ready to Buy a House?"

Most people go wrong by trying to time the real estate market instead of timing where they are in their life.

We only get one shot at life, so shouldn’t we take the best shot we can?

When the goal is deciding if now is the right time to buy a house, it really comes down to these 3 questions. 

Question #1: If everything goes your way, how long are you planning to live in the home you buy?  

Some people might say forever, others could be 2-3 years, and another group will say at least 10+ years or that they aren’t sure.  Current the average homeowner tenure nationwide is about 13.2 years according to this chart by Redfin.  

Of course, how long you want to stay in the home you buy is up to you, and it’s different for everyone.

Consider this comment from Billy Smith on this video.  

He and I had a great chat in the comments – thank you Billy!  I love reading comments from ya’ll.  

Anyways… In a nutshell, Billy shared with us he bought his house in 2008 at the height of the market for 180k. 

By the end of 2009, when the market collapsed, he said his home had a value of about 120k. 

But Billy held on to his home and later sold it in 2021 for 426k.  Congrats Billy, you did great!

So in 13 years of owning that home, Billy went from buying a house at the height of the market to the bottom and back up again when he sold for more than double what he first bought it for in 2008. 

I share this with you because real estate is cyclical. 

From a historical context, U.S. real estate typically appreciates over time

The longer you own a home, the more likely you are to ride out the ups and downs of the market, and the more likely it becomes it will be worth more than the price you first paid.

A mistake a lot of people make is trying to time the market. But that can backfire if they aren’t careful. 

For instance, many people thought the housing market would collapse in 2020, so they didn’t buy a home even though they could.  

Question #2: Are you financially prepared to buy a house? 

Key considerations include your credit score, savings for your down payment, and buyer closings. 

On a side note, whether mortgage rates go up or down, please make sure you chat with your loan officer about any points you might want to purchase or need to buy down your mortgage rate. As you plan out your finances, please remember to plan for home maintenance after you close. 

For reference, a good rule of thumb is to save 1% of the value of your home annually every year for maintenance. 

In many cases, you might not need that much money to maintain your home. However, it is prudent to save up a maintenance budget.  Just in case something big pops up that needs to be fixed, like roof repairs or replacing your climate control system. 

From my personal experience, I can tell you it’s costly to replace that stuff.  Far better to save the funds over time in case it’s needed vs. needing it and not having the funds.  Just a thought from me to you that I hope will save the drama I’ve gone through personally. 

Question #3: Is now the right time for you in your life to buy a house, or should you continue renting?  

Let’s be honest.  Sometimes renting is a better option for people. Especially if they plan on moving to another city in less than 3 years or if they aren’t ready to own a home yet. 

It’s easier to get out of rental than it is to sell a house.  On the flip side, rents also go up, down, and all around.  So you should be ready for that too.  Factor in how much you’ll pay in monthly rent for the time you might think of sitting out of the housing market vs. what you might pay if you decide to buy a house now.  There is always an opportunity cost in one form or another in real estate and with all life decisions.  Time is the one thing; we can never get back once spent.  

How to Avoid Homebuyer Remorse

The risk of not considering decisions upfront is regret.  When we don’t think things through, we become prone to making emotional decisions based in haste. 

And we all know haste makes waste! So don’t waste your time or money doing what someone else wants you to do in haste.

Do what feels right to you! 

Look, at the end of the day, there is an opportunity to buy or sell homes in any housing market.  It’s a matter of seeing where the opportunity exists and deciding if it’s right for you.  That’s the truth. 

It’s easy to get confused when we lose ourselves in the barrage of negative headlines.  There’s a multitude of that stuff out there.  I don’t know what’s worse… The negative headlines we’re slammed with daily or the onslaught of spam calls, emails, and Robocalls?  No matter which one is worse, it’s all bad, like hot wet, smelly garbage!

To me, and please tell me if you feel the same way too, we need some good old-fashioned honesty.  Not people trying to corrupt our thoughts or sell us something so frequently our head spins more than a top.   

Instead, we should focus on what’s important to us for the reasons important to us.

Then you can cut through all that noise pollution to hear the most important voice of all – your own unique voice. 

Take time to find your Zen within to gain clarity, and you will never let yourself down! 

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