"Should I wait to buy a house?"
The real question behind that is, do they think prices are going to go down or are they going to go up?
Buyers are always debating this in their mind. They think that there's going to be some kind of dip. But statistically, according to every model we're looking at today, that's not likely because this isn't a "housing bubble." This is a "housing shortage" that we're in.
This is a supply versus demand issue more than anything else. And actually, the experts in the industry have just upgraded their projections for what they anticipate sales prices to do in 2021.
Here's the latest update:
I'm going to compare this to what they said in January. In January, Mortgage Bankers Association, Fannie Mae, Freddie Mac, Zelman & Associates, and the National Association of REALTORS consensus was that home prices during 2021 would go up 5.3%. Somewhere higher, somewhere lower, but the consensus was 5.3%.
Now, what is it today? They just updated these numbers. Now the consensus has been upgraded more than 2%.
So now they're at 7.7% price appreciation for 2021!
My personal feeling is it's going to go much higher than that. But that's the consensus among experts.
So when you wait as a buyer, you're actually going to end up paying more money — not less.
And it's also true when you're a seller. Sometimes sellers think, well, I'll wait because I'll get more money. That's true. But that's only true if you're exiting the market.
If you're staying in the market and especially if you're buying "up" — buying a higher priced property — you're actually going to end up paying more because if the prices go up 7.7% here, they're also going up 7.7% up here.
So the actual delta between the two grows every month you wait. It's a mistake to wait.
The idea here is that we're in the same market. We need to be selling now and taking advantage of these massively low interest rates.
So those are some conversation points that you may want to be having with your client base, right? Make sure that they're aware that prices are likely to continue to grow higher. And the reason is supply and demand. And when they're buying in the same market, they want to do that quickly, not later — especially as prices are rising.
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