Should You Buy Now or Should You Wait?

If you ask this question to many real estate agents, they will advise that now is the time to buy, because interest rates will probably increase and home values are also on an upward trend. But this may not be sound advice. I have been in the real estate business since the late 1960's, and one thing that I have learned, is that each buyer's situation is unique and different, and current market pricing and interest rate trends are not the only consideration in determining whether to buy now or wait. Financial considerations should always be considered as well as a determination of how the decision fits into your long term goals, although people often make the decision based on needs that have nothing to do with money.

The following are some different circumstances that I have experienced with potential buyers that may dictate unique decisions:

1. Owners of a home looking to move-up or purchase a larger higher priced home. In a market on the upswing, now may be the time to make the decision to make that move. Higher priced homes will appreciate significantly more in an upward moving market like we are currently experiencing in Utah. If you wait, your lower priced home will increase in value, but not as much as the more expensive home that you are considering. Sometimes owners in this situation may want to wait to accumulate more equity for a larger down payment on the larger home, but this could be a costly wait. Please feel free to contact me directly at 801-558-4998 if this is your situation and you would like my opinion. And this is also where it comes in handy to have a professional financial adviser as well as a CPA tax adviser on your team.

2. Owners of a larger home that are looking to downsize, as we did about 7 years ago, may get hurt financially, as their larger home will appreciate more than the smaller home that you are considering. So from a financial standpoint, it may be better to wait in these circumstances.

3. Renters, that would like to have their own home, but are not sure if they will be living in Utah in the future. Renting may be the best option if you are not sure how long you'll be living in Utah. Selling a home can be costly, if you have to move quickly. 

However, if you are just waiting for the best time to buy, my advice is to contact a real estate agent quickly, to take advantage of the current market conditions. Waiting could be a costly experience, inasmuch as lower interest rates and lower home values will save you on your monthly housing expense.

4. Potential buyers that are moving to Utah from out-of-state that would like to rent in order to get more information about neighborhoods and other considerations in where they would like to make their more permanent home. While this seems reasonable, in this market it is expected that home prices will be higher next year as will the cost of money. And don't forget, that a temporary rent will require a second move when you do decide to buy. A lot depends on how long it is likely that you'll be in Utah. If you think that you could be moving on in a couple of years, it is probably better financially to rent, considering the costs associated with selling.

However, if you are confident that you'll be here for three years or more, I think it would be wise to buy immediately. Take the time to hire an agent that has the experience and knowledge of the area, and who can make up for your lack of knowledge of the area.

Even if you decide to rent for the time being, it would be an advantage to form an association with an experienced agent that can keep you up to date on market trends, and send you information on specific homes that you may be curious about. If you are planning on a move to the Salt Lake area, call me or send me a text at 801-558-4998 or an Email at johnhamilton2@gmail.com, and I will be glad to work with you to give you more information.

John Hamilton, a Certified Negotiation Expert, with a BA Degree in Economics from Drury University in Missouri, and MBA studies at the University of Utah, has been a Utah real estate agent for the past 46 years and a broker since 1972. His company, MediaOne Real Estate, is Utah's largest publisher, and seeks to provide Buyers a strategic advantage and Sellers the maximum exposure in today's formidable market.