Why Now Is Still a Good Time to Buy

Many people are wondering and asking if now is the right time to purchase a house. Buying a home is a major life decision, and it’s always important to consider this investment in light of the times we live in, in addition to your own personal readiness.

Shifting into 2023, the dual concerns of interest rates and inflation continue to generate headlines. The reason? Economic woes make bold headlines, and make people pay closer attention to news coverage. On the other hand, signs of improvement in the economy are less emotionally stirring, and not covered as often. A tame headline such as “Things Appear to Be Getting Better” does not rouse passion and cannot be repeated daily.

So with that in mind, let’s take a look at some of the national economic trends, and examine how these factors shape opportunities in the DMV and South Florida real estate markets.

Inflation demands our attention because of its impact on our purchasing power. But as anyone who had an economics class in college can tell you, inflation is a reaction to many marketplace forces. And more importantly, it follows patterns. Our historically long run of low inflation rates came to a startling end in the middle of 2021 as rates crossed the 5% threshold. And then they kept climbing. However, since the peak in the middle of last year, the monthly annualized inflation rate has been steadily trending downward. And at the end of last year, Kiplinger projected that the yearly inflation rate may drop to as low as 3.2% by the end of 2023.

Mortgage rates followed a similar pattern. The decade-long pattern of historically low interest rates in the 2010s ended in 2022, also crossing the 5% mark. Mortgage rates hit a high point in November of last year but are showing signs of easing. Forbes recently suggested in an article that “perhaps, the worst is over for mortgage rates — at least for the time being.”

With these changes in the housing market, the American consumer may be beginning to sense that this is a good time to buy a home. Consumer confidence in housing, according to CNBC, is beginning to rise. This could mean more buyers entering the competition for homes as the year progresses.

While you can never predict exactly what is going to happen with the economy, financial analysts are recognizing that downward trends are indicated for both inflation and interest rates. As is true in any investment situation, those who recognize patterns and take advantage of opportunities early tend to profit the most. Now might be one of those opportune moments to make your move and buy a home.

The DMV and South Florida areas stand out from the rest of the nation in many ways, including climate, beautiful neighborhoods, and incomes. In both of these locales, whether temperate or tropical, home values and incomes are higher than the national average.

For example, in the Coral Gables real estate market, the median value of owner-occupied housing units was $867,700 in the most recent census. Median home sale prices at the end of last year were about 10% higher than that. In Chevy Chase, Maryland, the median value of owner-occupied homes was $999,000. Homes for sale in Chevy Chase are currently listed and sold above the median. Both Coral Gables and Chevy Chase have home values that are substantially higher than the national median of $245,000, setting them apart from the current overall real estate market.

Incomes are also higher in these areas. For example, the median household income in Chevy Chase is over $200,000. Those with higher incomes typically experience less consumer-inflation-driven budget tightening. This means that more opportunities exist for luxury and high-end home buyers, especially those who see the purchase of a house as an investment that appreciates over time.

Beyond the dynamics of the housing market, it’s important to take time to assess your own life goals and financial position. Buying a home may be influenced by short-term trends in the economy, but for you, it is a long-term commitment. Kiplinger suggests that one of the key factors is your desire to settle in one location for years; that is, are you ready to put down roots?

Are you expecting any major life changes in the near future? Are you planning to get married or have children, possibly change careers or employers, or consider retirement? If you are, then what you are looking for in a home may change as well. But if you have reached a point of stability in your life in terms of lifestyle and finances, then it may be the right time to look at homes for sale and see what’s available.

When you’re looking at real estate, remember that you just aren’t purchasing a home. You are moving into a neighborhood. Research the localities in which you are interested. Areas like Chevy Chase and Coral Gables have their own distinct neighborhoods, each with its own atmosphere and amenities. Some of them may serve your needs and interests better than others. This is where a professional estate agent can be of great help. In addition, a qualified and capable agent can guide you through the ups and downs of today’s housing market and the opportunities available — to find what’s right for you personally.

Alejandro Ortega is a well-respected real estate agent throughout the DMV and South Florida areas, and he has extensive knowledge of each neighborhood. He looks closely at the personalized needs of his clients and values service as one of his top virtues, ensuring that you find what’s right for you. Reach out to Alejandro directly to see whether now is the right time to buy for you.