Would you rather buy now, when the stock market is up, you’re feeling good about your portfolio and assets, and mortgage rates are high? Or would you rather buy later, when rates are down, but your portfolio could be also- and everyone is screaming about the sky falling down?
I have no crystal ball. And I’m certainly not predicting a recession or a stock market crash. But after selling more than $1 Billion of real estate, I do know buyer and seller psychology.
Before there is a shift in the real estate market, before mortgage rates drop, before anything happens to equities, you need to know one thing about yourself:
What is your tolerance for making decisions when doing so goes against the grain?
Think about other times of recession. The newspapers and television were spreading the bad news du jour. Indecision and uncertainty, anxiety and fear were the flavors of the month. Quite a hard time to buy a house, right? What would your family, friends, or banker have said? Everyone would be urging caution.
My point? You can pretend that all you need to do is decide what you want to do, and then do it. In reality, however, the more noise there is, the harder it is to have clarity.
Compare that to right now. It’s not that there are ever an abundance of desperate sellers in New York City- people are just too well-capitalized, generally speaking. But prices are down, the stock market continues to roar, unemployment is low, and those sellers on the market today are real. That is, the conditions are actually excellent for buyers, with the one exception- higher mortgage rates.
Psychologically, it is much easier to choose to buy a home today- even if it doesn’t seem that way on the surface. So take advantage of a relatively quieter period, when the worst thing is that you have to navigate mortgage rates that are still historically much lower than they could be. And when rates DO drop, refinance. You’ll have a home you love, and a cheaper carrying cost as well!
If you happen to be one of the rare- and I mean extremely rare- people who can keep their head on straight when no one else can (think Rudyard Kipling’s poem If), then you have more flexibility than most.
Our advice is to make hay with the sun is shining- even if there are a few scattered clouds.
-Scott & The HRT