Are you Nervous and fearful of buying a house? You are not alone. Buyers fear buying a house.
Let’s look at the TOP 5 FEARS in today’s market. If you’re a first-time home buyer, or if you were just a second or third-time home buyer.
The fears and the nervousness and the stress of buying a house, it is pretty normal. Most buyers that I talk to, and I’ve been doing this for quite a while, most buyers, in fact, 100% of the buyers, when I sold the home to them or talked about buying, they always have some fear or some nervousness. So if you feel that way, it’s normal.
TOP 5 FEARS
How will inflation affect home purchases? Well, inflation is a very big concern to you and everybody else, but you have no control over it. It’s almost 8% today and it is a legit concern, but you buy when you are ready. Whether it’s infection now, a recession next year, or abubble in 2024, or an earthquake in 2026, who knows? There’s always something. So you buy when you’re ready. Inflation is a concern, but it is what it is.
The second fear that most buyers have today is there is a recession coming? That’s a great question. Experts are saying that we are going into a recession at least in the second half of 2023. If you ask me, I already feel that psychologically, a lot of the buyers and sellers, including myself, are in a recession. So, yes, we are in a recession. But here’s the good news. Historically, in the last six major recessions, four of the last six recessions, home prices went up. In the 1990s, during a recession, home prices went up by 2%. And of course, in 2008, during the major recession and housing bubble that we had, home prices went down 20%. But overall, four times in a recession, housing prices went up. But if you’re buying for the long term it should be okay.
#3 HOUSING BUBBLE
The question that we get, and a lot of the real estate people like myself are getting is there a housing bubble in 2022 or 2023? Well, nobody can predict the future, especially when it comes to real estate and especially when times are volatile like right now. High inflation, high home prices, and high-interest rate, and the stock market is going down. So nobody can tell if there is a housing bubble. But according to the numbers, my personal opinion is that based on experts and charts that I’ve seen, most experts are saying there is no housing bubble. Wow, that’s good news. So why is there no housing bubble? Well, the number one reason is there’s a shortage of inventory. So homes are going to sell, and there’s a lot of equity in the homes. In the last four, five, and six years, home prices increased so much, so there’s a lot of equity. And number three, that there may not be a housing bubble that adds to non bubble is that in the last ten years lenders were very tight lending loans or giving loans. So the homeowners are pretty strong and pretty stable. So there’s a good chance there’s no bubble, but at the end of the day, you cannot control it.
#4 INTEREST RATES KEEP RISING
The fourth fear is what happens if the interest rates keep rising? Well, that’s a good concern. That’s why you cannot time the market. You buy it when you are ready. Of course, if you bought your home two years ago, interest rates were almost 2%.Two and a half percent. A few months ago there were 5% as a few weeks ago they were 6%. So you may ask the question, well should I buy now or the rates will go up? Well here’s the question. What happens when the rates go up to 8% if they so you never know when interest rates are going to go up and how high they’re going to go up. You buy it when you are ready. There’s always something. If the home prices go down, rates go up. If the rates go down, home prices go up. So if you can afford your mortgage payments and if you qualify and your debt ratio works out, buy a house. You have tax advantages, you have lots of other advantages which I will not talk about right now. But here’s another thing. Did you know that they were not in real estate back then but in the 80s interest rates were12% and I hear they were as high as 18%? So the question is, should you buy at 6% or5% or should you buy a 10% or 18%? Who knows where they are headed by when you are ready.
#5 HOUSING PRICES
Will the housing prices go down? What if I buy a house and the house prices go down? Well, that’s also a very valid concern. What if they do go down. I bought my house back in the late ninety s and I bought it for 250. Sorry. Yeah, that was pretty cheap. But my house went up to $400,000.07 eight years after I bought it. Then it went down to 300 and I was scared. Oh my God, what happened? But you know what? Today it’s triple the value. So if you’re buying long-it rm, it doesn’t matter. If the home prices go down, they will come up. And as long as you have a fixed pay mortgage payment, your payments are fixed. So keep making those payments. It’s better than renting. Take advantage of the tax write-off. Take advantage of your neighborhood. Enjoy the house. You can never time the housing market. Just like the stock market, you cannot time it. So you buy when you’re ready. And lastly, overcome the fears and nervousness. Things happen when you overcome your fears.