Should I buy or Should I Wait?
The call came yesterday evening from a client/friend in Connecticut. “I wanted to buy a condo for our retirement, they were about $160K 4 months ago, but now are $190K-$200K. What should I do? Buy now for more, or wait till the market cools down?”
I get these calls and these conversations quite often lately.
As a real estate broker, I can only talk about real estate in present tense. I do not know the future. My guess about what may happen is as good as yours. Even though I am closely watching the market, even though I have a good 6th sense of the market, I do not see the future.
In my professional career I made so many predictions and was wrong so many times, that I know that I have to stick to what is today.
Actually, residential real estate, not investment, is always about now and here…
This is the reason it never stops.
- People buy and sell in the buyers’ markets…
- People buy and sell in the Sellers’ markets…
- People buy and sell when they need it, period.
Then there are people that can’t ever buy anything because they are afraid that tomorrow they may buy for less, and this tomorrow never comes, as we never know when this time comes unless it is too late.
2011 – 2012 prices were crazy low, right now we say it was the bottom of the market, but we know it today, we did not know it in 2011 and 2012. Were there many happy bottom feeder buyers then? No, the sales were pretty sluggish.
Those, who missed 2011 and think they will recognize it next time it comes are for a rude awakening: it is never the same, and next time, if it even happens in our lifetime, would not be easily recognized.
But residential real estate is about living happily thereafter, isn’t it? So, what are you going to do for years and maybe decades waiting for an absolute great price? Do you really win against someone who bought in 2018 and enjoys life all these years?
And then another thing to ponder. Yes, the heating market will eventually reach its peak and then the cooling period starts.
Do we know how long it is going to be heating up to reach the highest point?
And even more important, how long it would take to cool down, and what would be the prices then?
Many assume that the prices will be back…
Back to what?
To 2011-2012 level? To 2015 level? To 2020 level? To what was 4-6 months ago? What is the benchmark? What if the prices will cool down to today’s level? Or even to the prices of 6 months from now level, which may be higher than the prices today?
Median prices for a house in 1940 were about $2,500. If the market would go from low to high and then back, we would still have the same prices (about $37K in today’s money), but we don’t. Which mean that in reality, they do not go back all the way. They stop somewhere, and this somewhere may be higher than the prices we have today.
So, what do you say?
Should I buy or should I wait?