In this crazy market where homes sell in a couple of days with multiple offers some people are asking themselves why not wait?
Those who opt for waiting are usually hoping for some combination of fewer offers on homes (i.e. less competition), more homes for sale (i.e. greater selection) and a repeat of some version of what happened 10 to 15 years ago (drastically lower prices).
Somewhere, there is a point at which homes are no longer able to continue to appreciate at double-digit rates. However, the current price-appreciation is not driven by easy-to-qualify home loans. So expecting that prices will come crashing down will need some kind of minor miracle. Much more likely is that prices will eventually level off. This is only one reason “why not wait” will not help.
It is most unlikely that we will see new construction fill the need for additional homes for sale. First, builders are building only few homes at a time. Second, as soon as plans for construction are announced, people are lining up to register as buyers. Even in the in-land areas of Southern California we are seeing literally thousands of homeowners lining up to buy in a development that has 100 to 150 homes planned.
It may take a year or more to build every last house in a 100 to 150 home development. So even a year later there are still the remaining thousands of buyers looking for a home (minus the 100 to 150 who bought a home). Add to these buyers the investor-buyers who buy with the intention of renting out the home. These investment homes are now removed from the pool of available homes. So this move doubles the impact to the market. It creates competition and reduces inventory (homes for sale).
We are at extraordinarily low mortgage interest rates right now. This can not possibly last. Once rates go up, we will have fewer people who an afford the home they want. Statistics tell us that there will be more people having growing families. Last but not least, government moves very slowly when it moves at all. So all the bureaucracy that slows and denies construction is not likely to go away.
Why not wait? For all the reasons listed above. Painful as it is, continue to search for a home and make an offer whenever you come across one you like. Eventually, you will succeed. As little as 5 years later, you will be very happy you did. And if you need help, contact me at 760 622 5087 or firstname.lastname@example.org.