I admit that I sometimes fall victim to the “paralysis by analysis” mentality. Constantly consuming facts, data, and news, can sometimes give us information overload that causes more confusion than help. Last week, I saw a Dave Ramsey quote that basically encouraged people to buy a home now, all because prices are “sure” to go up in the next five years. At the same time, we’re also hearing that home inventory is rising, so prices are “sure” to drop? Which is true? The easiest action is to wait until more certainty presents itself, right? But when should you wait?

Selling your home, whether an investment property or primary residence, is a very important decision. These decisions contain multiple consequences from quality of life, cash flow, and even tax ramifications.  The normalization of the real estate market has allowed for buyers to regain the upper hand in negotiation as listings have increased 24% in Georgia. Buyers are able to view multiple properties to compare condition, location, and amenities to determine the proper location for their next investment.  Do these conditions mean that you should sell your property? Our advice is never to time the market. Instead develop a marketing strategy that fits market conditions and your goals, if you are ready to sell already. If you are flexible in your selling schedule, that’s the time at which we talk about what your opportunity cost is in not selling now, or your upside to waiting. The answer is not always, “sell now.”

The purchase of real estate has a similar path of responsibility. The variation of needs and wants will drive the size, location, and ultimately the price of property under consideration. The current state of the real estate market has everyone scouring history to find the “right answer to time the market”.  I have reviewed the last 50 years of housing data (boring for most folks, fascinating for me), and have concluded that the current economic indicators mirror the late 1970’s.  Inflation is being realized in every facet of our lives.  Do I wait for interest rates to come down? Is the price of single family housing going to drop? My advice is to determine your goals and move forward. If you rush to buy, just because prices might increase, and you are not ready financially, have you really saved yourself anything by placing extra burdens on yourself? I think not.

The real estate market is currently reaching a normalization that we have not experienced since the Covid explosion.  How do you move forward? Sellers will continue to list properties and should proceed with strong pricing but also carefully not over-pricing. The time of “name your price” for sellers is waning. Buyers are becoming intolerant of over-priced properties.  With contractors in short demand, move-in ready properties are selling most quickly.  A great way to differentiate your home is to paint, replace flooring, freshen landscaping, and declutter before listing. This may mean you need to wait to list until those items are completed. The addition of pools, major kitchen updates, and other large ticket items need to be scrutinized carefully. I am not seeing a return on investment for those items right now.

As a buyer, we recommend that you determine your budget in today’s dollars. The interest rate is the cost to borrow money. While the rate is higher than a year ago, it was 8% in 2000. The median house price in America was $131,616 that year.  We ended 2021 with the median home price at $346,900. Be realistic about what you can afford, and shoot for that. If you can’t sacrifice granite countertops and a large lot, continue to work toward that goal and perhaps wait until you are in a position to afford exactly what you want. On the other hand, with inflation and interest rates inching up, remember this motto: Marry the house, date the rate. Interest rates fluctuate. If you can sacrifice some of your wants for a home you can more easily afford, you can always refinance when rates lower and add exactly the finishes you would like with the savings.

After reading this, are you scratching your head as to the answer to my question? Should you wait to buy or sell? That answer is personal to every situation. Alison and I are not cookie cutter REALTORS®. We want to help make obtaining your real estate goals more simple. How do we do that? We spend time with you, learn your situation, and then help you make a plan that is individual to your needs. 

We’re serious–Give us a call for lunch, coffee, an hour or a day’s worth of time. 

It’s what we do and how we serve.

We’d love to help you make that plan.

–William