The home buying process can be as frustrating as it is exciting. Having to pass up on two or even three dream houses because the time just isn’t right can be highly discouraging. After all, you and your partner have been putting in the hours and making cuts—all to ensure that your savings account is nice and healthy for that moment.
You can’t help but ask, when is the right time to buy a home? Will it ever come? Or will you have to settle for rent year after year until retirement, when you can live the snowbird lifestyle?
The answer is that it will come. You just need to be patient and know what to look for. But what are the signs the time is right? Below you’ll find what we consider to be the top 7 signs it is the right time to buy a house.
When is the right time to buy a house?
The best time to buy a house is when the market has more homes for sale, the same houses are sitting on the market longer, and the asking prices begin dropping. This means there is more inventory, and the market you live in is shifting from a seller’s market to a buyer’s market.
That doesn’t mean we’ll leave you to figure things out from there. The trick is to develop a sound understanding of the home-selling market in your area. That does sound intimidating but easing into it helps you to understand the more complex elements.
And while it certainly helps to work with a trained agent, you can give yourself a good head start by looking for a few key details that tell you when it’s an excellent time to hire an agent in the first place.
7 Signs That It’s Time to Buy a House
So, what should you be looking for? Below you will find seven signs that tell you it’s the right time to buy a home. Keep in mind that each market is different and can work in various stages.
In other words, just because things are perfect for a buyer in one neighborhood doesn’t mean it’s true in the other. To ensure you land the home you want for a fair price, you need to be patient and wait till the time is just right for the home you want.
It’s wise to keep emotional ties out of the way and broaden your scope as you may very well find an even better home in a different part of town.
A tell-tale sign that the market is shifting in your favor is when parts start dropping. To know if they are, you need to keep an eye on the market for some time. First, get an understanding of average prices by lot size, square footage, and features. Study these details, and over time you will start to see how things fluctuate and know when is the best time to buy.
Inventory is increasing.
Inventory increasing and prices dropping usually go hand in hand. This is because there are more sellers than there are buyers. Therefore, sellers want to decrease their asking prices to ensure they can sell their property. Of course, you still want to wait and make sure that prices are at or below market value to prove it is a good time to buy. Don’t be afraid to make offers lower than the asking price when this happens.
Homes aren’t selling fast.
As a rule of thumb, homes will be on the market for less time during a seller’s market. This is because there are more buyers than sellers, and the homes are going quickly. If listings are sitting on the market for longer than 60 days, it’s generally a sign that it’s currently a buyer’s market. If the homes are going quickly, that’s usually a sign that the offers being presented are higher than the asking price, and you’re better to wait.
Just because inventory and pricing usually go hand in hand doesn’t mean they will. Waiting to buy during different parts of the year can have a profound effect on your strategy. For example, it is suggested that you buy in November for a better price and in April when inventory is high.
Keep in mind that these suggestions are general and might not pertain to your market. Still, the idea that seasons affect your experience is true, and you’ll want to familiarize yourself with your local market to know what time of the year is the best for buyers.
The home has been listed for longer.
If you are tied to a specific home, waiting might be your best option. The longer it’s on the market, the more likely it is that the price will drop. That’s when it’s in your best interest to buy. Keep in mind that you might be lucky enough to have the seller accept an offer that’s below even the adjusted price.
Don’t solely focus on the home you want. Even if you are emotionally committed to that home, you need to keep an eye on comparable properties in the area. Pay attention to the asking prices, if they’re dropping, and what they sell for. In doing so, you can get a good idea of the home you’re interested in’s actual value and make a fair offer that the seller might accept.
Another offer has fallen through.
If an offer has fallen through, the seller may be even more motivated to find a buyer. If you see this, don’t hesitate to make an offer. However, you should tread lightly and make sure you know why the original deal didn’t work out.
It may be due to the buyer failing to uphold their end of the contract, but there may be an issue with the property that will either warrant a lower selling price or you to move on to another home.
Wait Until You are Ready
One of the biggest mistakes you can make is jumping on the opportunity before you are ready. Many folks see low mortgage rates as the prime time to invest but neglect to consider the overall price. Don’t make this mistake. If the home is too expensive, it’s too costly—regardless of interest rates.
Furthermore, just because you can afford a home by living on a tight budget doesn’t mean it’s really a good time for you to buy. Be smart, and wait until you get that promotion, increase your down payment, your savings, and improve your credit score to buy a home.
The point is that you can’t just pay attention to the market. Pay attention to your situation. Doing so is the only way to ensure that your dream home will improve your quality of life.