The past year in the housing market has been quite a ride, full of contradictions and opposing trends. Here at Adirondack Premier Properties, buyers often ask us whether timing the housing market is a good plan. Our best advice is to do some research & consider your personal situation to assess the pro’s and con’s of timing the housing market. In many ways, the real estate business has been unprecedented in recent years. We realize it can be confusing knowing whether to wait for rates and prices to come down or to jump on a home purchase when inventory is low. Keep reading to understand recent trends and what you should consider before making any decisions about timing a home purchase.
Timing the Housing Market – Recent Trends To Consider
With housing sales decelerating, home builders slowing down production, and mortgage interest rates more than double what they were a year ago, the housing market on the whole is looking different lately. Mortgage applications have also dipped to their lowest level in 22 years. On the other hand, home prices continue to remain near record highs, driven by several factors including low supply, household formation by Millennial and Gen-Z homebuyers, and a strong job market.
If you are considering buying a new home or investment property, at some point you will probably find yourself asking: Is now the time to buy, or should I wait for housing prices and rates to come back down?
Your Personal Situation
Our team here at Adirondack Premier Properties advises that timing the housing market is seldom a good idea, especially during market volatility. Given your own unique life and financial circumstances, only you and you alone know if the time is right to become a homeowner. If you have considered your own personal situation and still feel uncertain about whether to buy now, consider the following:
- Home Price and Job Trends
Even if home prices fall, they usually don’t fall uniformly across regions and local markets. Prices in areas with plentiful jobs may go flat for a while, but they usually don’t keep going down long term. In a nutshell, regions with more jobs generally have steadier home prices. If you are looking in an area with solid job growth, you may never see the home price decreases you may be waiting for.
- Inflation and Mortgage Rates
When inflation rises to high rates like we are experiencing now, mortgage rates usually come up too, only to come back down once the government takes action, the economy improves and the rate of inflation slows. While it may be tempting to wait for mortgage interest rates to decrease after action by the Feds, there is no guarantee this will happen in the near future. Rates rarely adjust immediately after Fed action and it’s wise to remember that this could take a while.
- How Long You Will Keep The Home
If you are concerned about making a big purchase during a time of high inflation, realize that buying a home is a long-term investment and usually a hedge against inflation. It’s more favorable to buy when you plan to stay in the home for several years or longer, allowing time to build equity and recover your closing costs. So if you will be in the home you are considering for a number of years, right now could be the ideal time to buy.
- Your Lifestyle and What You Can Afford
As you decide when to time your home purchase, it’s always best to buy when what you are looking at is affordable and when the purchase supports the right lifestyle choice for you. Even if you have to choose a smaller home or a lesser neighborhood, timing your buy when prices are affordable and when a move best suits your lifestyle is ideal.
- Unpredictability of Market Bottom
The smartest investors don’t wait for the bottom to buy, because there’s no predicting when that will be, if ever. Waiting could cause you to miss out on the perfect home. Getting priced out of the market is always a possibility too.
Timing the Housing Market – Is It Worth the Risk?
Trying to time the housing market is a tricky situation to say the least, requiring a lot of careful research and decision making. Currently in the United States, there are conflicting housing reports throughout the country which can make it hard to assess what’s really happening in your area. In general, sales and new builds are slowing, mortgage rates have increased and mortgage applications are down. All this while home prices are close to market highs, driven by low supply and strong employment.
Another increasing trend is homebuyer patience going back to pre-COVID levels. Buyers are more willing to wait things out than they were at the height of fast-paced pandemic deals. You may feel more comfortable taking a wait and see approach, hoping that prices and rates will go down from where they are now. However, we caution buyers that this approach always runs the risk of waiting too long and being left out of the market completely.
What’s Happening in the Lake Placid Housing Market?
Throughout the Lake Placid region we’ve seen a minor correction in the real estate market with home prices lowering just slightly. If you are grappling with knowing if now is the time to buy or whether you should wait for prices and rates to come down even further, our experienced agents at Adirondack Premier Properties usually advise against timing the housing market. Especially in a year of contradictions like we are currently experiencing, it can be a risky venture that leaves you with an unfavorable outcome. If the timing feels right to you, and you find a home that you love and an interest rate that you are comfortable with, we suggest moving on it.
If you are still uncertain as a homebuyer if now is the time to buy in the Lake Placid Region, here are some other things to consider:
- National Trends Don’t Always Reflect What Is Happening Here
The Adirondacks, and especially the Lake Placid Region, are a tourist destination and vacation area for many people. While home prices may go flat, a trend that can be seen currently in the local market, they usually won’t fall significantly.
- Long Term Ownership is Good
If you are looking to relocate to the area or pick up an investment property to keep in your portfolio long term, buying a home now might be a wise move. Owning the home for several years or longer can be a hedge against inflation, allowing you to build equity and recover closing costs.
- Flexibility and Price Variance
If you are looking to make a lifestyle choice and relocate to Lake Placid or the Adirondacks, consider properties that may be available in the surrounding area, close to your ideal town or neighborhood. If you find yourself priced out of one area, chances are you can find an affordable property within proximity of your original target town or neighborhood. Prices throughout the Lake Placid and Adirondack region can vary quite a bit between adjacent towns and neighborhoods, and you never know what options might open up if you expand your search area.
- Now Might Be Your Time
Real estate prices can be fickle, changing quickly. Waiting for prices to bottom out might be futile, as this may never happen. If you wait too long by timing the housing market, you could get priced out if things trend in a positive direction, as they often do in a highly sought after region like Lake Placid.
With years of experience helping our clients successfully buy and sell homes in the Lake Placid region, our agents at Adirondack Premier Properties never advise our clients to take the risk of timing the housing market. As stated above, purchasing a home is a long-term investment. The Lake Placid region’s history as a popular tourist destination will likely offer you good protection on your investment. We believe that if everything feels right to you, moving forward to purchase the Adirondack home of your dreams is a solid plan right now.
Our expert agents are always available to answer your questions, help you find your ideal property and share insights about the local market. Give us a call today!