Real estate investments are always a good idea, as property prices often tend to rise with time. If you have the money and a desire to invest, buying a house is a great idea.
The year 2020 has been an economic rollercoaster for people all around the globe. As uncertain as the situation is right now, it is natural to hesitate about making such a big financial decision.
Many investors are planning to wait out this period before buying the house they want to. However, making this decision is not that simple. A number of factors come into play before you can decide whether to buy a house now or wait for the new year to come.
Think About Your Finances
Before taking such a big financial decision, you must first consider the status of your personal finances. Since it is a time of crisis, you have to seriously think about whether you can afford the expense or not. Savvy investors say that if you have the cash to buy then it is best to buy a rental property that you can also live in. Many people undergo this route and end up with little to no mortgage payment to pay after their tenants pay their rent since rent is as high as most mortgages these days. Needless to say, not having a mortgage payment to worry about during these uncertain times can be a lifesaver for your finances. Regardless, whether you are renting out a home or renting a home make sure that you go over all of the lease agreement details in your state to know what you are liable for and what you are not liable for. The best lease agreement forms online are can be found at https://www.ezlandlordforms.com/documents/rental-lease-agreements/
Even if you have savings, you have to consider if you can risk spending it. The unemployment rate has shot up everywhere, with almost every corporation making some cuts. Many of those who have a job are working for lower pay.
If you are feeling insecure about your employment and future, then it is better to wait for the next year to come. If you are in debt, do not invest. Focus on clearing the debt first and hopefully by 2021, you can buy the house.
If your financial condition is stable and you can afford a mortgage loan, try to find your dream house and compare home loan options as the mortgage rates are currently low.
The Housing Market In The US
There are a few things you have to consider before buying a house. Perhaps the most important factor is the housing market condition. The prices have held their own, especially after June. The national median price of housing is surprisingly higher than last year.
You might think that since the prices are high, it might be better to buy your house next year. But, the reason for prices being high, because it has been driven by the overwhelming demand in the market.
Why has the demand increased during the pandemic? Mostly because the mortgage rate is experiencing a record low. So, most people are buying houses now to take advantage of the low rates. There are a few other factors that will affect the prices.
Prices Will Vary Depending on Location
Prices vary depending on location. In some places that have been hit hard by the pandemic, housing prices might be low because people from out of state are unwilling to move there right now. So, even if there is supply, the demand might be low.
Another reason for the increased price might be a lack of supply, because of the unwillingness to sell properties during the pandemic. The house prices fell quite a bit during March and April, and even though the growth is slow, prices are rising again.
If the prices are high in your desired location, you might want to hold off until 2021. Try looking for foreclosed houses as they are cheaper, such as Myrtle Beach Foreclosures Oceanfront.
Thinking About The Future
Consider some future factors before making a final decision. Some of these future concerns might drastically affect your decision of whether to buy a house now or wait for 2021 to come.
Supply Might Get Lower This Year
As mentioned earlier, the supply is low. As the year is coming to an end, more sellers might decide to wait until next year to sell their properties.
As the supply dries up, you will have lesser options to choose from. Chances are the kind of property you are looking for is not available or you are having to buy a property for a higher price than it is worth.
Unless you find something you love, a house that is a viable buy, try to hold off until 2021. High prices driven by low supplies often means that the properties available in the market might be of low quality. After the pandemic, supply will increase as more sellers will enter the market.
Prices Might Increase In 2021
Experts are predicting that the condition of the housing market is going to improve in the next few years. This means that if you are thinking of holding off, hoping for a lower price next year, you might get disappointed.
As people recover from the pandemic and the employment rates increases, people are more likely to do both, buy and sell. If the demand remains high, the prices are unlikely to drop. Hence, if you find a property at an affordable price, buying it will be a good decision.
However, an increase in supply means you will have more options. So, it is better not to settle for something unless you really want it, since real estate is a longterm investment.
What You Should Do Now
The important factor is to stay updated. Keep in touch with a trusted local real estate agent and ask them to inform you, if the kind of house you are looking for, becomes available.
Real estate websites have become much more sophisticated, so you can keep looking for houses in your desired areas. Be on the lookout for houses that are becoming available.
If you don’t feel confident about spending now, hold on to your money and try to cut down on expenditure to save some more before you decide to invest.
If your financial condition is stable and you can afford a mortgage loan, try to find your dream house now as the mortgage rates are currently low.
Final Thoughts
Whether you should buy a house now or wait for 2021 to come, depends on many factors. Make sure you feel financially secure enough to buy the house. You have to become debt-free before you take on a mortgage loan.
The condition of the market, housing price trends will also come into play before making that decision. Keep an eye on your local housing market, to find low prices. Think thoroughly before you decide to buy that house you are dreaming of.