The Expert Podcast

When prices go up on real estate many times the instinct or the reaction is to try to hold off to try to get a better deal later and waiting out the housing market has almost never been a valid strategy. There was a short period of time from about 2008 to maybe 2010 or 11 where there was some crazy bubble built into the market that went back down because of the factor that had to do with mortgage fraud people getting mortgages that weren't legitimate mortgages and that jacked up the prices of houses.
This recent increase in home values doesn't appear to be from a factor that is dissolvable meaning that they're more permanent chronic changes in the way houses are used and we talked before about where some of the increase might have been a pent-up demand that was actually held back and now is is equaling out the market. A lot of people who didn't buy a house in the last couple years regret the fact they didn't buy a house.
Here's a couple in florida that were out looking for a house and they decided to wait the market out after they started looking at homes in june of 20 about a year and a half ago they put their search on pause a month after shopping think it was likely prices would go down at the end of the year well instead home prices kept rising further pushing the couple out of the housing market. They are looking for two our three bedroom two bath home in about 250 to 300 but it's tough to find houses in that range that they want to buy we've seen on our channel there's plenty of 200,000 houses they just might not be exactly what you want so they can decide either to still stay in that range and maybe get something that's not their ideal dream house or to stretch up their range.
The strategy of staying out of the market probably isn't going to serve non-buyers in the long run. Home prices in south florida like a lot of places skyrocketed and intense demand popped up the realtor that they interviewed said about 30 to 40 percent of the clients decided to wait out the housing market.
What does that mean well think about it even with the prices gone up as much as they did there's still 30 to 40 percent of clients that are pending in the market it's like a hidden demand that's out there so that only means the prices are going to go up even more even without those clients in the market the prices went up which means that at the best case scenario the prices are going to skyrocket even more worst case scenario if there's something that pulls back on the housing market these 30 percent or 40 percent of clients coming back in the market are just going to at least keep it where it is.
As buyers begin to look again they find homes that are a hundred thousand dollars more money so he was um one person was looking at a house that was listed at 410 in january four months later it was at 480 he ended up getting it for 450 but think about it january to april three or four months cost 40 grand in price that probably was his down payment that's a 10 down payment so prices are skyrocketing we're seeing prices that of houses that were two or three hundred thousand are now in you know almost near five hundred thousand.
"I'm kicking myself" this person said is a shopper that put a search on pause discovered properties were below the quality she was hoping for but if she had purchased a house that was below the quality she was hoping for she would have saved the hundred thousand dollars that that jumped up. Look we don't want anybody to buy a junky house or house they're going to be disappointed with but if you don't purchase at least something in today's market the prices are going to go up you're going to pay rent for a little while longer and it doesn't matter where you live would you rather be in a home that's maybe mediocre not exactly what you want or rent something that maybe is a little flashier but you're renting so that's kind of the trade-off that you have.
Homes even at the upper end people are looking for a 1.2 million dollar house and now they got to pay 1.6 million that's a 400,000 jump um and that's like a free house for some people 400,000. The buyer says "I'm not sure when there will be a correction or when prices will stabilize or if" a lot of the signs are pointing to other way around if 40 percent of buyers decided to wait that means those people are still out there lurking so no matter when more houses come in the market there's going to be a demand for them.
Just food for thought keep in mind that you know you can always buy a cheap house 200 250 280 whatever it is and get something that maybe is not your ideal house paint it up fix it up spend some money you know doing some landscaping and have something at least that you only you can live in and then if at some point in the future you want to trade up because your income has increased or because the market is different you always have that option and you're going to be in a better equity position than somebody who's been renting for the last two years.