When is the right time to buy a home?
The answer is quite simple, “when you are ready.”
As we have witnessed over decades now, home prices vary. However, when you consider the time factor, houses have consistently trended upward.
Short term thinking is not always a good application to apply to a home purchase. Waiting for prices to drop in a metropolitan community is usually a very short-lived window, and unless you plan to sell immediately, short sighted.
The current cooling period is certainly an opportunistic opening for home buying.
Consider for a moment the market movement in residential homes.
While we are experiencing a cooling off from the red-hot feeding frenzy of last year, it does not immediately translate into the end of the gold rush.
Just like the stock markets, property markets move up and down. There are a few people who make their living trying to out guess these markets. For most of us, we need to use that incredible ingredient called patience.
Buying a home to live in is a different decision than buying a property with profit in mind. Of course, you want your investment to appreciate, however, if you are planning to live there, you want location, convenience, room, good schools and the amenities you can afford.
Your home is not something you are planning to sell in the foreseeable future so laboring over the current price should only relate to what you can afford.
Now, if you are a student of history or not, pick any 10-year time frame in Silicon Valley over the past 100 years. Look at the house prices at the beginning and the end. The trend has always been up. Some periods more dramatic than others, but always up. And, yes there have been some serious decreases during difficult times.
You can recall the recent Great Recession of 2008-09. Did you know this followed an outrageous rise in home prices? You may recall that 17% of Santa Clara residents lost their homes. Today, those homes that were “lost” are selling for two and a half to three times their recession price.
We have now moved into a more moderate market and as always, the law of supply and demand determines price. While we are seeing new homes, apartments and condominiums being constructed, demand remains high. We have not fulfilled existing demand.
The current cooling period is a natural and normal breather that takes place in any economy. But if you want to know what your home value will be 10 years from now, look at the last 10 years, or the 10 years before that.
Insert the magic elixir of patience and you to will become a multi-millionaire whether you intended to be one or not.
So, how do you know it’s the right time to buy?
The answer is still the same. When you are ready.