Is It a Good Time to Buy a House?

Is It a Good Time to Buy a House?

Buying a house is high on the list of most people’s to do list. Whether it’s for an investment or a place to live, there are many questions that you should ask yourself before taking the plunge and making one of the biggest financial decisions in your life. There are many things which will determine if you can buy a house or not and whether it is the right time for you to do so. Here are a few questions to ask yourself before you make a decision.

Buying Safe

If you do decide to shop for a home in the current market, make sure that you’re smart about it and stay safe. Maintain all physical distancing practices while looking at homes, even if there is only a seller or agent present. Ask whether no-contact options such as virtual tours or virtual closing with digital signage are options, and if touring the property request that any doors or other barriers be opened before you arrive to reduce contact. Wear a mask, bring hand sanitizer and take the same precautions that you would in any other social situation. This may seem excessive for viewing a home, but keep in mind that these practices not only protect you, but also protect the seller and agent as well.

Demand Is Staying Low in Most Markets

Most of the time, a buyer’s market is caused by shifts in the economy that have people trying to save money; an example of this would be a recession. These economic shifts temporarily reduce the number of people who are willing to take on large debts, creating a glut of sellers trying to entice a smaller pool of buyers. The buyer’s market typically fizzles out once the number of sellers shrinks or the economy stabilizes.

In the current buyer’s market, the economy certainly plays a factor. There is an external factor at play here as well, however: The physical distancing that COVID-19 requires has added additional worry about open houses and other forms of interpersonal contact that are traditional when buying or selling a house. There’s still a lot of uncertainty surrounding the pandemic, including how long it will last, so with this external factor and the currently stunted economy we could see demand stay low for longer than you would expect in a buyer’s market situation.

Market Recovery

This isn’t to say that the market won’t recover, of course. Some states have already started reopening non-essential businesses and other parts of the economy, and other states have plans to start reopening soon. The economy will likely stay sluggish for a while, but reopening is the first part of recovery. Even the pandemic is becoming something less of a factor as people continue to practice social caution and science continues to work toward treatment and vaccine options. While market recovery may take longer than in the past, a recovery will happen, and the good deals that buyers can find now will become less common as things move forward.

Income stability

Asking yourself where you are in relation to your job, family and financial position will likely give you a clear answer as to whether the time is right to buy a house. Many people moving out of home for the first time fall into renting as a default. However, if you have a stable job and can get a deposit together, you could put yourself years ahead by avoiding rent all together. Older people will likely find that they will need to upsize, or downsize, depending on their family arrangement. You’ll have a hard time securing a loan if you can’t show the banks that you have a regular, stable income. If you work casually or as a freelancer, there are ways to present your application to the bank which will give you the best chance of buying a home. For example, as a freelancer or self-employed worker, you need to show the bank two years of tax return, proving your income. However your income is structured, you should be aware of all the requirements of a home loan, and how to improve or alter your situation so that you can secure some capital.

Family

Your family and the kind of lifestyle you want to lead will be the greatest factors affecting the type of property you buy. People tend to shift to larger houses as their family grows, and smaller ones as the kids move out. Being aware of your family’s changing needs is integral to finding a property which will suit you. Being aware where you will be in 5 to 10 years-time will also play into your decision making.

How to time your buy

Timing when to buy a property can be a dangerous game. Friends, family and self-proclaimed ‘experts’ can give you the impression that the property market is ‘down’ and you should buy now, or that it is ‘hot’ and buying would be foolish.

Forecasting the market is a tricky pursuit that even the most experienced property professionals hesitate from doing. Things like the Coronavirus are the perfect example of the type of unknowns which can turn the market on its head.

As a general rule, you should buy into the market as soon as you can, regardless of if it is ‘hot’ or ‘cold’ at the time. In the long run, you’ll be better off if you buy sooner than if you wait and grab a slightly cheaper property because the market cools off. Holding property for the medium to long term is the key to making money in the property market.

To give yourself the best chance of finding the right property at the right price, consider engaging a buyer’s agent to advise you on current market conditions and what sort of property best suits your needs.