MARKET UPDATE: WHY NOW IS STILL A GOOD TIME TO BUY AND SELL!
Keystone Homes GA/SC
We build quality new-construction homes in the Aiken, Augusta, Greenwood, Savannah and Statesboro!
As expected, this has brought about many questions and objections for our current and future prospects. What everyone wants to know is…
1. Is now a good time to buy a home?
2. Should I wait until interest rates drop before purchasing?
3. Should I wait until home prices drop before purchasing?
4. Is now a better time to buy resale than to buy a new construction home?
These are all very good questions to ask ourselves- let’s consider what the experts are saying.
Dave Ramsey, an American finance personality, radio show host, author, and businessman says that although the housing prices have increased double digits between 2019 and 2020, we’re seeing a much lower projected percent of the increase in 2022- at just 8%. Prices will continue to increase and that “one thing and one thing ONLY drives house prices: Supply vs. Demand. When demand exceeds supply, house prices don’t tumble.”
Ramey reminds us that we’re currently experiencing in the housing market is different than what we experienced in the 2008 recession.
How are they different? In 2008 demand fell below supply and prices dropped. What we’re experiencing now is demand exceeding supply. We also have 12 million more young adults in their 30’s in the market for a home, then there was in 2006.
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In a recent Facebook post, Dave Ramsey says “Bottom line: We still have too many buyers chasing too few houses. So, for the next five years, we will continue to see house prices INCREASE, certainly not crash.”
He says, this is a great time to buy AND sell a house.
John Hunt, a graduate of Samford University with a BA in Finance/Economics, Founder, President, and Chief Analyst of MarketNsight, and one of our trusted market resources, says after a decade of under-development and under-building, inventory was low as far back as 2020. He says, even with a slight slow-down in demand, stemming from higher interest rates, we do not have enough inventory for those who still need a place to live.
Hunt says the only answer is to increase supply at the grocery stores, gas stations, microchips, and housing.
Which brings us back to our most frequently asked questions- Is now is a good time to buy a home? Should I wait until interest rates drop or home prices drop before purchasing? Should I buy a re-sale home instead of new construction? The answer to these questions are- ultimately it’s up to you to decide!
If you need housing now, you may not have a choice- but if you do and you’re waiting for interest rates and prices to go down, it may be a while. As mentioned previously, home prices are set to increase over the next 5 years and although interest rates are constantly changing, they are expected to remain and likely continue to increase in the near future.
As far as re-sale versus new construction, Hunt, as of his July 7th Market Update, says “the price spread between new and resale is the lowest we’ve seen in 20 years” making it the best time to consider a new construction home over a re-sale home.
If you choose to buy now, ask one of our approved lenders if you’re eligible to buy down?your interest rate or refinance for a lower rate in the future. If you are eligible this could decrease your monthly payment by 1-2%, a savings up to $500/month for the first couple of years.
See our approved lender list, if you’re interested in obtaining pre-approval to buy a home, learning more about buy-downs, and/or refinancing.