Have you jumped back on the fence with interest rates contributing to and creating an unaffordable environment? You are not alone in this unfortunate circumstance where so many consumers have been stuck. More important is the lack of choices in our historic low inventory dilemma as well as the much higher prices on the existing homes for sale.
But if you truly need or want to be a homeowner, the trade-offs have to be part of your vocabulary in this current market. If not, then you need to ask yourself “how long are you willing to sit on the sidelines to wait for your starter, move-up or dream home? Have you or will you pass up a home, due to your being steadfast and maybe stubborn about wanting every little thing in your home?
You must look at current interest rates as somewhat of a short-term and temporary event as I believe sometime this year Fed Chairman Jerome Powell will finally pull the trigger and consider lowering rates by at least a ¼ point. Moreover, maybe he will do this several times during the year. Waiting until rates go down may be necessary for those whose budget will not warrant qualifying for a mortgage.
Then there are some who have something I call F.E.A.R., meaning fantasized expectations appearing real. They can afford to purchase, but are deathly afraid of buying, at what some might think or call the top of the market. But what I would like to know is where is the proof that home prices will go down? The demand from those who can qualify to purchase is the main cause for prices to keep escalating. However, the increase in prices has moderated and has not been occurring at the same excessive rate that has been experienced in the last three years.
Finding a home in this market can be challenging, but again trade-offs should be tantamount in your decision making. Even if you can’t find your exact home with all the bells and whistles, at least you can begin to experience homeownership. Some increased equity should still occur this year and most importantly you gain the tax write-offs (that you were providing your landlord), begin experiencing stability and building roots within your community. And now you are the landlord and have the power to decide when you want to move. Lastly, you can build your long-term financial wealth.
When rates do come down, you can always refinance and decrease your overall monthly costs in owning. The increased savings over the length of your mortgage will more than save you enough money to make it worth your while to find a home now, even at the higher current rates.
One important tip: Once purchasing, make sure you begin to grieve your real estate taxes. The deadline is March 1, 2024. You can hire a company to do this for you or you can attempt to do this yourself. Companies do not charge anything unless they can be successful in reducing your taxes and providing a refund. The fees can be as low as 30% of the amount refunded. If you need any recommendations, feel free to call me.
The United States is currently still far behind in the construction of residential housing. We are deficient in approximately 6 million homes to satisfy current demand. However, some areas out West and even in Florida have seen their inventory increase and even double over the last 15 months as demand has cooled for those excessively priced homes by hurricane-affected areas, especially locations by waterways.
Every year, we need a minimum of at least 2 million homes to be constructed just to keep up with those who started and expanded their families as well as those who have been stuck in rentals and are qualified purchasers. There are GenZ and GenX millennials who may have outgrown their current homes and are earning greater incomes and need to purchase a larger residence.
Many builders are offering short and long-term financing at potentially better rates than conventional banks. There are many areas where there exists an excess of new housing inventory. Negotiation is the name of the game and you as the buyer today, have the power and advantage with developers of newly constructed homes. You may not have as much of the benefit of being a purchaser on Long Island for new homes (depending on the location) but better to try and fail than to succeed at nothing!
Most importantly, the winter months are the best time to find a new home as the competition is usually much less. You have to be strong in your negotiating skills in the end to save you and your family as much money as possible.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. For a 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com My New Electronic signature/Bio/Reviews to save to your Cell/PC contacts: https://onetapconnect.com/turnkeyrealestate-philraices