It seems like a great time to buy a house (if you don’t have to sell), values are down (so affordability is up), interest rates are at all-time lows, and high levels of inventory are languishing on the market. It all adds up to buyers who have negotiating power. Yet, the latest housing reports are undoubtedly making many home buyers skittish about entering the market. Here are just a few tips for people trying to figure out if now is the time to buy:
- Set realistic expectations about home value appreciation. Zillow is expecting minimal appreciation in most markets over the next few years, so the first thing any buyer should do is figure out how long they are planning on staying in the home. If it’s not at least five years in most markets, consider renting a home, instead of buying.
- Don’t try to time the bottom, you’ll never get it exactly right. While some markets have further to fall, the steep drop in values are most likely behind us. Some markets like San Francisco and San Diego are already seeing 5% appreciation year-over-year. If you are planning to buy within the next year or so, you should definitely start shopping.
- Research your loan options. Yes, interest rates are at historic lows, but it’s hard for many potential buyers to get financing let alone a super low rate. Increase your chances of finding the lowest rate available to you by shopping around. Shameless plug: Zillow Mortgage Marketplace allows you to get custom rates from a variety of banks (national and regional) and brokers. Don’t worry, you can compare rates and lender reviews without sharing any personal information. You call the lender if you are interested, not the other way around.