Home seekers may worry about the possibility of a real estate crash. Is it best to buy now or wait until prices drop? Do they run the risk of losing out on appreciation of their current home, while hoping more affordable options to show up?
the Housing Market Cycle
As we witnessed with the 2008 crash and 2017 real estate inflation, the housing market tends to run in cycles. It can be difficult to navigate at this point in time if you should wait or rush to purchase a home as some experts theorize the bubble could burst very soon.
First-time Homebuyers Need to be Careful
First-time homebuyers are particular impacted by the decision because the results of a crash after purchasing a home would be an immediate loss. Those individuals with property to sell while buying another will at least experience a tradeoff. When prices rise, both properties go up in value. When prices drop, both properties quickly depreciate.
If you buy without the intention of selling for a while, the risk is significantly smaller. But what if interest rates are (likely) impacted as well? This is where it can become difficult to even afford the property you previously purchased.
Pay Attention, Don’t Predict
Although there is no magic ball to completely predict what will happen with the housing market, it is important to pay attention to the economy. Even better, speak to a financial expert who can offer some greater insight and expertise into the cycle.
Different people face different personal situations though that ignite their reasons for wanting to move. If you are currently crammed into a one-bedroom, 600-square foot apartment with your significant other and you want to have kids, waiting one way or the other may not be worthwhile. If you are simply looking for a bigger home because you think you can make money, it is best to move cautiously.