1. I’m going to wait for the market to hit bottom.
The only way you know a stock was at its lowest is when you look back and say to yourself, “If only I had bought Coca Cola when….”. The housing market is no different. The only way you know the exact bottom point is in hindsight.
2. If I wait, prices will fall, and I’ll get a better deal.
In a recent Time Magazine article, Lending Tree provided an excellent case for the folly of waiting to buy:
|
Today |
Cost in 12 Months |
|
|
|
Typical Home Price |
$218,900 |
$197,010 |
|
Put 20% down |
$197,010 |
|
30 Yr. Fixed Rate |
|
|
|
|
Interest Rate |
5.5% |
6% |
|
|
Recession ends, and the Fed starts to raise rates |
|
|
|
Monthly Payment |
$994.31 |
$994.94 |
Conclusion: If you waited a year to buy, you would have saved nothing and spent a year living someplace you’d rather not be.
3. I can’t sell and move up because I won’t get enough out of my house to afford to buy the new one.
The BEST Time to sell and move up is in a DOWN market. Let’s say your home was once worth $350K, and today it’s worth $300K. You took a $50,000 hair cut after a 14% decline in value. What about the house you want to buy? It WAS worth $575K and today it’s worth $495K. That seller is going to take an $80,000 hair cut and you gain $30,000 in overall value.
4. All the good loans are gone.
Rates are low, prices are low and banks need to lend money in order to keep their doors open. The reason we’ve heard so much about lending these days is due to the sub prime mortgage crisis – a result of banks lending money to individuals who really weren’t in a position to buy in the first place. For individuals with reasonable credit, there are hundreds of mortgage programs today with low – crazy low! – rates.
5. There’s safety in doing what everyone else is doing.
Markets are cyclical. The reason for the cycles is the masses follow each other. So when things were heating up, it was like the gold rush. Buy, buy, buy!!! Yet, many were caught because they missed the right Time and they bought at the top of the market.
The truly wealthy are educated about real estate cycles, and they capture the opportunities in each cycle by going AGAINST the direction of the herd.
The median price in Reno-Sparks has rolled back to the values of late 2003. How often do we get to roll the clock back on prices AND take advantage of low rates? Hardly ever. So…if you want to seize an opportunity to build your wealth, the Time is NOW. And yes, you might be going against the herd, but trust me – Donald Trump doesn’t blink in a down market. He buys everything he can get his hands on when everyone else is “thinking it over.” |
