Buy Now or Forever Pay Your Rent

Buy Now Or Forever Pay Your Rent

“I’m going to wait until the market cools down”, “I hear more inventory comes out in the spring time”, “I don’t want to get caught up in a bidding war”

If you live on Long Island I sure you have heard someone say one of these things and odds are if you’re in the market to buy a home you have probably said these exact statements yourself. As an active agent in one of the best seller’s market in a decade I hear these statements and many more like them from Buyers every single day.

What I am going to go over with you in this article is the same thing I tell my clients every day. While it’s true the market is HOT, inventory does spike in the spring and you most likely will get caught up in a bidding war right now. The fact of the matter is if you wait you are going to pay a much bigger price!

Three factors will cause you to pay much more money if you decide to wait. The first and most important to realize is rising interest rates. Rates keep rising at alarming rates and for every .25% increase in rate will cost you about $20,000 over the life of a 30 year mortgage. Financial forecasts keep saying that every time they can raise the rates they will because they feel the economy is strong enough to maintain the increases. With the national average rate around 5% right now, if that raises to 5.5% by the Spring/Summer buying market you’re looking at paying $40,000 more over a life a 30 year loan for the same exact house you would buy today. Does going $10,000 over asking in a bidding war right now seem so bad?

The second factor is rising home prices. It’s the oldest rule in the book. Supply and Demand. Simply the demand is much more than the supply of homes on the market. It has been this way for the past two years causing prices to sky rocket. According to Multiple Listing Services of Long Island the median price of a home for Suffolk County rose 6.8% last year. With no sign of a huge influx of inventory these prices will continue to trend upwards. So your home that you could have bought in the Summer/Fall of 2018 for $400,000 will instead be listed for $425,000 to $440,000. Again I ask you does getting caught up in a bidding was and paying over asking for a property right now seem like a bad thing?

Lastly, you are not the only one. Meaning there are 100s of buyers at any given time looking in your exact neighborhood with your exact criteria and exact budget. Just lying in wait to pounce on YOUR dream home. So what this means is even you you do decide to wait until the spring/summer market it wont market. The demand is so huge that in my opinion it will take at least another 2 years to balance out. So now you waited, interest rates are .5% higher (cost to you $40,000), prices continued to rise so now that $400,000 house is $425,000 (cost to you $25,000) and the demand has not dropped off at all so you are still caught up in a bidding war and went $10,000 over asking for a grand total of $75,000 more cost to you by deciding not to do the right thing and stay aggressive in purchasing a home NOW.

Now is the time, it’s more important than ever to make your move and conquer your fear of purchasing a home. Unless you feel like paying rent forever, Do yourself a favor and stay aggressive, stay focused and trust your agent!

John Walsh

Galaxy Realty Group

631-569-0018