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.
  • Neal Mansfield

    Thanks for taking the time to write this great post!

    Neal Mansfield
    Excite Realty – Cedar Creek Lake, TX

  • JB

    Jill, I love the fact that you didn’t try to oversell “buy a home now”. A home will always be a good investment.

  • DebtFree

    Trying to reconcile the contradiction here:

    “It seems like a great time to buy a house (if you don’t have to sell)”

    If it’s difficult to sell, ergo few are buying, ergo people recognize it’s not a good time to buy, ergo prices are heading lower.

  • Simon Campbell

    Great advice Jill. I think the really low interest rates are going to bring a lot of buyers out of the woodwork this fall.

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  • Mark

    Sound advice. Any particular pointers for a couple shopping in Madison, WI for a starter home? Something’s that likely to appreciate in the next couple of years.

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  • Jill

    Hi Mark, Jill from Zillow here. I recommend that you check Zillow’s local pages for Madison.

    You can see where home values are appreciating or depreciating in Madison down to the neighborhood and ZIP code level. We have other useful metrics too, like the percentage of listings with price cuts.

    And of course check out all the Madison homes for sale listed on Zillow!

  • John |

    It does seem that prices could still be inflated a bit, considering the end of the tax credit and the poor economy. I would only buy if I knew it was a house I wanted to stay in for the next 15 years.

  • Ashley Wilson

    Great Post! Yes, the interest rates are at an all time low, but buyers are out there.

  • Jose R. Sinclair

    Excellent tips Jill, we all need a place to feel at home and the right time to buy a house is when you have the need and ability to do it. This decision is something that only you know when to take the positive action to move ahead.

  • Michael

    Great advice since real estate isn’t seeing the best of times.

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