If you’ve bought or have been trying to buy a home over the last several years, you know that the market has been absolutely crazy, and that includes Prescott!
Homes would go under contract before officially being on the market. Homes would go active and within one day there would be multiple offers on the property, and people would find themselves in a bidding war. Homes were going for over asking price and more than they were actually worth. This is called a Seller’s market and it was hot, and it was not slowing down for anyone!
With all that going on, unless you were a cash buyer, could put in an offer on the property within the first day, or could make an over asking price offer, your chances of landing the contract were slim.
Because Prescott’s market is higher priced than others, the affordability that 2019 seems to be promising might not affect us greatly, but some help is better than none, right?
Here are a few key changes in the market this year:
There will be more homes available to buy. With tight inventory on homes, many buyers have decided to wait it out because by the time they call their agent, the home they were looking at has already sold. Who can compete in a market like that? How this will be changing is more new builds in our area, which brings increased inventory. The problem is that new inventory might not always be in your price range, or if it is (most in the 200-300k area), it also seems to be a lot of other people’s price range and you’ll still have some competition.
Soaring prices will slow down. Even though the inventory of homes has been tight over the last few years, the prices of those homes have done nothing but rise (like we said, it’s a seller’s market). In 2019, that looks to be slowing down slightly. Home prices will continue to rise to be sure, but they will rise at a much slower pace now. According to Realtor.com, there will be a “2.2% increase in home prices this year – compared with a nearly 5% increase last year.” Prices don’t look like they’ll stop rising completely, so it’s best to buy as soon as possible to begin building on your home equity.
Rents are rising and will not stop. Speaking of rising prices and building equity, another reason to buy is so that you can stop wasting your money on renting and start investing in your home. While buying a house is a very expensive adventure and can seem scary, keep in mind that along with home prices, rental prices are rising as well. A top dollar market means that those who are able to buy and turn those homes into rentals for extra income have to charge more for rent. Think of how much they need to make on rent just to cover the mortgage, not to mention make a profit off their investment. We know that buying is a lot of cash up front, but it is also a lot of cash saved later on by building equity in your home and not having to give your money to a landlord every month.
Mortgage rates are lowering. Mortgage rates were predicted to rise in 2019, but they have actually been dropping. Lower mortgage rates are good news for buyers because it significantly helps with home affordability. Higher rates means a higher mortgage, which means pushing a home’s price over what you’ve been pre-qualified for, where obviously, lower rates means the opposite. However, Realtor.com thinks these lower rates are only temporary because of the long-term direction of mortgage rates seems to point to them going back up because of our strong economy.
We hope these pointers give you some hope about trying to buy a home this year, or at least make you consider that perhaps you’ve waited long enough and it’s time to take the plunge. If you’re waiting for another crash, it doesn’t look like that is going to happen. The time to buy is now!
To talk about possibly buying a home, or to get a better idea of what this might look like, we would love to help! You can call us at 928-771-1111.