Interest rates are reducing, when will be the best time to buy a home?
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Interest rates are reducing, when will be the best time to buy a home?
Connor with Honor - August 28, 2024** Tags: [real estate](/-/Blog/tag/real estate), [connor with honor](/-/Blog/tag/connor with honor), [best advice](/-/Blog/tag/best advice), [santa clarita open houses](/-/Blog/tag/santa clarita open houses) ** 0 Comments | Add Comment
Crystal(Cristal) Ball, anyone? (sorry - basketball - I didn’t have the other one :( )
Now that the rates are starting to slide in a “buyer’s beneficial” direction, the question is how can you time it to buy when they are at their lowest?
Maybe the question is not in the correct format? Maybe the thing you should be considering is buying before the rates get too low and everyone else jumps into the market to buy.
When that happens, you will have competition beyond your imagination. Now, if you are holding all the cards, maybe a cash buyer, maybe can close quickly, maybe with a lot of access to money, etc? - Then the rates going down issue is not going to be your problem or concern.
But if you are a home buyer and rates are important, which they are in all cases, you will want to reconsider.
The same will apply, if the interest rates drop, then your competition will be against the cash type “fellow” I just mentioned and those others who are using financing such as yourself.
It is not typically the case for a cash buyer to be in competition, and in most cases, depending on the seller’s time frame, cash, and conventional buyers will have equal advantages in the current Santa Clarita / Greater Los Angeles market.
As a home buyer, where interest rates are moving in a better direction for you, you may want to consider buying and then refinancing your loan to the new “lower” interest rate.
There is a lot of discussion if the interest rates dropped into the 4’s and what would happen. I know for a fact, in a couple of months our excess real estate inventory would be depleted. Your home buying competition factor would increase by a value of +10 and it would be standing room only when a home is first listed for sale.
The home sellers would be come more bold when answering or responding to a buyer’s request for repairs, credits or discounts. Leaning toward not doing anything, due to the many offer’s received, the buyers should be so lucky to have been accepted (seller’s thoughts - not mine).
That being the case, maybe a buy before that market will be more appropriate. But only venture into this realm, if you are truly accepting of the prevailing interest rate you are going to be locked in at and where the home will be financed at the origination point with your new home loan.
In other words, don’t buy on the hopes that the interest rates are going to truly get to the point where you will be happiest. Only buy a home with the factoring in of today’s wages, interest rates and terms to be agreed upon with regard to the home you will be buying.
If now you are seeing homes in the Santa Clarita Valley and greater Los Angeles areas having a signed-off offer within a week to 10 days, if the market’s rate reduces further, you will have home sales where we will see the home buyers removing and and all contingencies to remain competitive.
When buyer’s start giving up their contractual rights within a real estate purchase, that action needs to be completed with some thought. Now, we can think things until the cows come home, thoughts and decisions is how that buyer will get the questions they need answered to keep themselves safe.
If you are a home buyer in a very competitive real estate market, you may need to shrink, reduce some of those contractual time frames in order to compete with the other offers that the seller has or will receive. Remember, it’s not always first in that get’s the home. The home seller’s of today give a bit more time than that, in most cases. Yes, there is always the “one off rule”, where someone being a bit off, will accept the first offer in, for other reasons than wanting to have offers compete against each other.
If you can get your home inspections completed within 10 days instead of the 17 days allowed by contract, then maybe that can be a seller advantage. They may give more weight to your offer than the others that were received, but they were not willing to reduce that contingency time.
There are other time frames that can assist the home seller, besides inspections, maybe you are willing to, or able to waive the appraised value? Maybe you wrote the offer for more monen that the home seller is asking. This can come about by a highly competitive market, making an offer on a home for more than the listing price, or maybe as a home buyer you need some of your closing costs picked up.
In the new commission/concessions space, maybe your going to need to ask the home seller to pay your realtor, and that comes about by increasing the price. It’s at that time when an appraisal waiver and a promise to inject cash into the transaction maybe helpful. However, this is very advanced when it comes to buying real estate and should not be done without the thinking and considering it with an expert guide who is on speed-dial.
When you are ready to buy a home in the Los Angeles areas, you will want to take it as fast as you can to learn the specifics about the housing market at ground zero. If you are set on buying a home in Castaic, CA, you will then want to find out the commute times, school locations (if applicable), and the other local “Castaic” community amenities.
Then it comes to the speed at which the local “insert city name here” market is fairing. For Southern California, I have our market reports that are available. If you have an address of a home that you really like in a neighborhood you desire, the you can punch that exact address into my Market Reports field. You will get a complete real estate market report and that is a great place to start your house search within those parameters.
A good first step before wanting to buy a home in any market is to do some research on how the housing trends are moving. If you are in a buyer’s market where we have a steady decline, then your strategy is going to be less ‘in front’ than if you were buying a home in a fast paced market with multiple offers on each of the homes for sale. That would a strong seller’s market and that is reminicent at the time I’m writing this August 2024.
I’m Connor with Honor and I’m glad to be of service to you and yours. Be well Santa Clarita and, I’m Connor with Honor, over and out!
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