For the past year, the housing market has been favoring buyers. Soaring market values were short-lived as many people decided they just could not afford to live in certain areas because of the cost of housing. This has caused many sellers to lower their prices. While this sounds like good news for you, the housing market can be very fickle. Depending on where you want to live, you may end up having to pay a small fortune for the home of your dreams.
This is why watching the market, surveying neighborhoods, and finding a good agent will help you in your search.
While you should not become a slave to the housing market, you should keep the following in mind before buying your first home:
Just because you buy a home for a great deal does not mean you will make a huge profit when it is time to sell it. The housing market will continue to change and since this is your first home, you may want to choose something you can pay off quickly and make a larger profit on in the future.
Also, remember that any improvements you make on the home will increase its overall value. Just don’t spend too much money on improvements. Creating a home improvement budget and sticking with it will help you make those monthly mortgage payments and other payments that will be due.
One of the biggest mistakes that first time homeowners can make is buying a home for a lot less than they budgeted and then making improvements that will end up costing more money in the end. If you can find a great deal on a home, use that extra money as a cushion in case you lose your job or are too ill to work. Owning a home is a big responsibility. Knowing how the market is moving and spending your money wisely will help when you are creating a budget, applying for a mortgage, and deciding how much to put down on a home.
Making The Most Of The Housing Market
While you should be watching the housing market, there are other areas of interest you should be watching also, such as:
Building Rates In Your Area
If you notice the housing market has also caused the building of new homes in your area to decrease, then you may have to enter into a bidding war in order to buy your first home. When new home construction goes down, this can mean one of several things:
While that housing slump may bring a reduction of housing prices, you should consider making a bid soon after finding the home of your dreams because bidding wars will only end up costing your more money.
Number Of Foreclosures In Your Area
When looking for a home, you should consider looking at homes that are under foreclosure. This can be for many reasons, but usually banks that hold the titles want to unload these homes quickly so that they do not lose more money than necessary. Many times auctions will be held or the home will be advertised as a foreclosure in the newspaper or online.
You should check out these homes because you may find exactly what you are looking for in a home.
Stock Market And Gasoline Prices
Even if you do not play the stock market game or own a car, you should still pay attention to these areas because they are usually what will dictate housing prices and the cost to heat and cool the home.
When the stock market is doing well many people will spend their money more freely, which will give way to higher housing prices. But when gasoline prices go up so will the price to heat and cool a home, which may make homebuyers reconsider buying until the prices fall again.
This could be a good time to buy a home if you are willing to pay a little more each month in utility costs.
The impact society can have on the housing market can be huge, and it can also have lasting affects. Buyer’s market’s are created when there are more homes available than buyers, while seller’s market occurs when there are more people who want to purchase homes than there are for sale. These housing markets go back and forth due to issues mentioned above.
In The End
In the end, when you are ready to buy a home, you should make the decision based on what you can afford and how much money you can put down for your new home. Just because you find a home that has a huge price reduction and you are not comfortable financially, does not mean you must buy that home.
Buy a home when you are ready. Many times, people will buy a home because it is cheaper in the long run than paying rent each month. The downside to home ownership is that you have to make your mortgage payments on time each month. Very few lenders will give you more time to come up with the money. If you miss even one payment, your home could be foreclosed upon. You will have no place to live and your credit score will suffer severely.
If you can afford to make the move into your new home now, you should not wait too long before making an offer. The housing market can change quickly and with competition out there, you may end up losing more money if you don’t make an offer after seeing a home that you like.