Common Sen$e: Is NOW Still a Good Time to Buy a House? Art Wood The housing market has been all over the news lately. It is a HOT market, and people are regularly getting OVER their asking prices. I heard from an agent the other day that the house on which they made an offer had fifty-two offers! In this crazy market, a lot of buyers have given up, or are waiting until the values start coming down. I can certainly understand the first reasoning because they grew tired of seeing houses every weekend, only to be outbid by a cash buyer. There is a lot of burnout among buyers for this reason. I would encourage you to stay the course and continue to work with your agents and lenders to submit the most bulletproof offers you can. The stars will align eventually, and you will get that dream home. With that being said, I want to address the other set of buyers that want to wait until the values come down. There is no doubt that house prices are out of control. We have seen over twenty percent year-over-year appreciation in some areas, so that has people screaming “bubble.” I don’t disagree that house prices will stabilize at some point, but to think we are going to have a value correction seems far-fetched. I think the reason people feel this way is because the Great Recession isn’t that far behind us, and that fear still remains. People watched their home values go down forty percent. (My $320,000 house in Tucker appraised for $250,000 in 2009.) What I have learned in my 47 years is that fear is a terrible motivator, because most fears are irrational. In this case, we have to look at what caused the last recession, which was irresponsible lending. 100% financing / No Documentation / Negatively Amortized loans were the norm. People had no skin in the game and were not property vetted. People hit hard times, and what was supposed to be their key to wealth suddenly had zero equity and they were actually going backwards. The easiest thing to do was to let the house go. When everyone is letting their house go to foreclosure, values tank. Real Estate was the driver of the recession. But the thing they say about recessions is that no two are alike. So here we are in 2021 and talking about 2008 repeating itself but I am here to tell you that the same headwinds are not in place. The mortgage industry has corrected and is lending in a responsible manner again. Down payments and full documentation are required now on 95% of loans. 99% of interest rates are fixed. When people fall on hard times, they are not going to walk away as they have too much to lose. They will sell and capture the equity in their property that will help keep them afloat during the tough times. I don’t believe house prices will level off until we see interest rates increase but I also don’t believe that’s certain. Are people going to want to sell their home that has an interest rate in the twos and buy another house with an interest rate in the fours? My suggestion is not to overthink it. Even if houses come down 5%, and interest rates go up a half point, your payment will be similar or maybe even higher. If you want or need to move, this is a great time due to the super low interest rates, and you don’t want to look back a year from now and say, “ I wish I would have…”
Our Town DeKalb
Art Wood (NMLS #118234) is the branch manager of the Art Wood Mortgage Team of Goldwater Bank, located at 2341 Main Street in downtown Tucker. “Tucker’s Mortgage Guy” for fifteen years, he is a former Tucker Tiger (Class of ’92), and co-founder and organizer of Taste of Tucker. Family guy, community guy, and definitely not your typical mortgage guy - it’s all that he does that makes Art Wood who he is. Contact him at 678.534.5834 or art.wood@goldwaterbank.com.
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