I have been getting inundated with the question, “Is now a good or bad time to buy real estate?” The answer really depends on your desired end goal.
This probably comes as no surprise, but the media and many real estate doomsayers have been predicting a collapse in the real estate market for early 2023. Keep in mind, these are many of the same people that have been making that same prediction year after year for the past 5 years. It’s easy to predict bad news because it grabs all the headlines. Yes, sales have slowed over the past quarter but let’s put it all in perspective and understand what’s really happening.
Let’s talk about some truths.
- First – this market is NOTHING like the one we had in 2006. Lenders haven’t been writing bad loans to over leveraged buyers. Don’t expect the market to be flooded with foreclosures and short sales. It’s not going to happen.
- Second – the days of 3% interest rates are gone, and probably never coming back. So, there’s no need to wait around for them to return. Yes, rates are likely to dip some in a few years. Because of this, lenders have come up with a very interesting loan called the 2/1 Buy Down to help buyers bridge that gap until rates improve. Let me know if you would like to know more about this type of buy down.
- Third – There’s a phrase often used in real estate, “The best time to buy a property is last year.” Although, we are experiencing small dips, ultimately the price of real estate continues to rise. As I’ve said in the past, it’s like a saw blade pointing upward. Don’t expect to see pre-pandemic prices again. It’s not likely. Over the past hundred years real estate values have consistently gone up and up, outpacing inflation.
Here’s something else to consider. For the first time in the past couple years, you can shop around and view multiple properties. Inventory is up a little (although still very low) and we’re finding that sellers are more likely to negotiate than before. In some cases, sellers even offer concessions.
Lastly, Hilton Head, Bluffton and The Lowcountry aren’t like just any US market. We’re special……a true coastal commodity. And in case you don’t believe me, SC ranked #1 in the Nation for home sales per 100,000 people in January of 2023. People want to live here, and that’s not going to change.
In short, if you are looking to flip a property, given the prices and higher interest rates, now is not an ideal time for you to buy. But if it’s your goal to move permanently, or hold onto a property for several years, now is still a great time to buy.