Does It Make Sense To Wait To Buy A Home Until Prices Decline?


Does It Make Sense To Wait To Buy A Home Until Prices Decline?
By Scott Rogers • March 3, 2022
Does It Make Sense To Wait To Buy A Home Until Prices Decline? I think not. I think it will be a long wait. But sure, I am willing to be wrong. ;-) Home prices have been rising quickly, of late... 10% increase in median sales price in 2021 10% increase in median sales price in 2020 How high can prices go? Will they decline at some point? Some would-be home buyers wonder whether they should just wait things out... with the thought that if homes prices are going up this quickly, certainly they will have to come back down again at some point... and maybe they should wait to buy until that time comes. I am not convinced that home prices will decline in the next few years. A few points to consider... [1] Longer Term Trends A decade ago, the median sales price was $169,900. Now, it is $270,000. Prices increased rather slowly in the first half of the decade (1% - 4%) and then more quickly in the latter half of the decade (3% - 10%). If home prices had increased a uniform amount each year, this ten year rise from $170K to $270K works out to be a 4.75% increase per year for 10 years. This is higher than my understanding of long term norms (3% - 4%) but not by much. [2] Supply and Demand We seem to continue to have more and more folks (individuals, couples, families) who want to call Harrisonburg (or Rockingham County) their home and would like to buy a home in this area. So, demand keeps climbing. Supply is trying to keep up, but is clearly failing, as inventory levels are remaining stubbornly low. So long as we continue to have well more people who want to buy homes than there are homes to buy, it seems likely that prices will keep rising. [3] My Crystal Ball OK, actually, I don't have a crystal ball. Darn. But as I look at likely scenarios for the next few years, I am not thinking it is very likely that prices will decline. Putting some arbitrary numbers to it, here's my best guess as to the probability of each of these scenarios... 10% chance that homes prices three years from now are lower than today 20% chance that home prices three years from now are within 3% of today's' prices (average of 1% increase per year) 40% chance that home prices three years from now are 6% - 9% higher than today's prices (average of 2% - 3% increase per year) 20% chance that home prices three years from now are 10% higher than they are today (average of more than a 3% increase per year) 10% chance that home prices three years from now are more than 15% higher than they are today (average of more than a 5% increase per year) So, is there a chance that home prices will be lower in the near future -- and you should wait until then to buy? Yes, it is possible, but it does not seem likely. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 24, 2024 (unless otherwise noted).
Comments (0) or Subscribe