April 14, 2021 - 4:48 am
Spring is typically a busy time for real estate, but with home prices soaring, is it the best time to buy during this atypical year? GOBankingRates spoke to real estate agents and experts across the country to find out when they think will be the best time to buy this year.
Now is a good time to buy in urban areas, especially New York City
“The time is now,” said Frederick Warburg Peters, CEO of Warburg Realty. “The market is super busy and there is not much good inventory here in New York City. The increasing number of vaccinated New Yorkers, combined with the advent of spring, bespeaks a very active market.”
Christopher Totaro, an agent with Warburg Realty, does not believe New York City real estate prices will be getting any lower this year.
“The best time to buy was six to eight months ago,” he said. “Traditionally, the ‘best time to buy’ does not and likely will not apply for a year and possibly longer. Therefore, the next best time to buy is now.”
Buyers who act now will also benefit from low interest rates.
“Now is a great time because interest rates will likely find their way back up to pre-pandemic levels this year,” said Mihal Gartenberg, also an agent with Warburg Realty. “Buying now and locking in the low rates has a huge impact on buyers’ budgets.”
Home prices may cool down this summer
Vanessa Alvarez, COO and founder of the real estate startup Nexme, believes that the current market, in which buyer demand continues to drive up prices, will cool down this summer.
“A number of factors will cause the market to cool down a bit: increase in mortgage interest rates; lack of supply will cause buyers to hit pause and resume after the summer; the increase in vaccinated people means people will want to go out and enjoy time with friends and family [rather than spend time home shopping]; and builders’ supply chains will take some time to get back up and running,” she said. “We’ll see the market cool down in the June/July timeframe. This will cause sellers to re-evaluate whether they really want or need to sell, or are just trying to take advantage of the market. Home prices will recalibrate.”
Elias Papadopoulos of RE/MAX Unlimited in Brookline, Massachusetts, notes that summer is typically a cooling-off period.
“Each year, the hot spring market starts to cool off as we get closer to the 4th of July before picking up again mid-August,” he said.
Some buyers may want to hold off on buying this year
Christy Walker, a broker/owner with RE/MAX Signature in Phoenix, believes prices will remain high for the rest of 2021.
“I don’t expect a cooling-off period this year,” she said. “However, we will experience some contraction in the next couple of years, which is healthy for the market. When that happens, many people may choose to look at making a move if they aren’t able to find what they want now or if they buy something with the understanding that it could be temporary. They can reposition themselves when conditions are more favorable for buyers.”
Papadopoulos notes that even if waiting means buyers may have to pay more in interest, it could save them money overall as current real estate prices are inflated due to high buyer demand.
“The fear most buyers have is that interest rates will go up and it may cost them more,” he said. “What they must realize is that when there are multiple offers on a property, it causes the price to go up and up, which ends up inflating prices.”
The best time to buy is when you are ready
The best strategy for making a home purchase is to buy based on your personal financial situation, not by trying to time the real estate market, Gartenberg said.
“The real answer is that buyers should buy when they are ready,” she said. “If they are ready now, they should buy now. If they need to wait, they should wait.”
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