Why Buying This Year Would Be A Smart Move; 2018 Homebuyer Predictions
After a certain age, paying rent is brutal, you are paying another person's mortgage and writing that check only gets more painful as the months go by.
Many justify not buying by speculating that the market will downturn again or that now is just not the time. Yet several indicators prove that 2018 is the year of the homebuyer.
1. Interest rates just climbed a quarter percentage point and more are scheduled. You may think a quarter percentage point is not a lot, but that is a small increase. If interest rates were to jump just one percentage point (very likely over 2018) the difference is substantial.
On a $600,000 home with a fixed rate 30-year mortgage that one percent difference is $344 per month and over the life of the loan it is a whopping $126,480. Yikes.
2. You think prices are high now, well they are predicted to keep going up. Granted we are not going to escalate like we have seen, they are not going to reverse. Higher price paid for the same house compounded with a higher interest rate and the picture begins to get clear that 2018 is a key time to buy.
3. Inventory increases. The number of available homes for purchase has been tight in the past years and a major cause of the dramatic spike in pricing (supply and demand at work). New construction starts have been hitting higher points in 2017 (just look at all the skyscrapers in Downtown LA and condo developments on Walnut St here in Pasadena) which will increase inventory in 2018.
This increase in inventory will make more options for you and is the cause of the lessening of the price spikes (but not enough to reverse pricing). More options to buy will lessen the bidding wars and multiple buyer offer situations that were very common in 2017.
But don't just take my word for it, Realtor.com did a great job of breaking down these same Three Reasons Why 2018 is the year to buy. Read it HERE.
Are you a homeowner curious to know if we have reached peak price? Well, Moody's did a pretty extensive breakdown of what is to come. Their prediction: a 4% price drop in the summer of 2019 as the effects of tax reform comes to full light.
Michael Robleto is a REALTOR® with Pasadena based Podley Properties. His analytical and open approach to sales has served his clients well in his twenty years of sales. Michael brings a modern data and technology-driven approach to real estate while focusing on the historic architecture of Bungalow Heaven. Tapping his experience in media and journalism, he publishes in-depth blog articles that will be of interest to homeowners and home-buyers. He can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog BungalowAgent or at www.BunaglowAgent.com/blog. For Sellers or Buyers Agent representation he can be contacted directly.