Should You Buy a Home in #Kitsap Now, or Wait?
Even for people not thinking of buying or selling right now, it's hard to escape notice that it's been a crazy year (and then some) in Kitsap real estate - indeed, across the wider region, and nationally. We have an especially on-the-move population here, with Kitsap Naval Base service members and their families among our neighbors. So it's almost certain that you, or someone you know well, is thinking of moving soon.
With the focus on real estate, you might be wondering if buying a home right now is the right move for you. Here at Dupuis Team, we sometimes tell people that we advise AGAINST buying (or selling) a home in their present circumstances. Since we only generate income based on closed sales, that might surprise you - but it's true! We don't just want clients, we want SATISFIED clients. People unhappy with their real estate transactions aren't doing themselves, us, the community, or the market any favors - and we know that. So we try to be very honest with our clients, when they pose the question.
People who ask, "Should I buy now?" are not always first time buyers, although those clients are obviously going to be among the most tentative and nervous about moving forward. Because market factors - median housing prices, rate of price changes, mortgage interest rates, and more - have been so changeable week to week in recent times, even seasoned home owners who are simply thinking of changing where they live are asking that question without a lot of certainty right now.
Some of the main points people have to consider when buying a home include:
- Can you leave/sell the home you're in? This is perhaps the most complex issue. Know when you lease is up, or where your existing mortgage stands. Consider it may take several months to actually get into a new home in this market.
- Is your debt/credit rating in good shape right now? This matters because you'll almost certainly need to qualify for a mortgage in order to buy a home. If this side of your finances need shoring up, you're better off focusing on that intensely for a bit, and revisiting a mortgage in the near future.
- Do you have a good cash reserve for the up front costs of home purchasing? Many first time home buyers are surprised that buying a house is not like buying, say, a new TV. There are staggered expenses along the path, and you need to be prepared up front and for whatever will be due upon closing.
- Have you factored in likely needing to bid ABOVE asking price in your budget? This is a really big deal in Kitsap right now, and you must be savvy about it. Successful bids on homes are going for, on average, about 6% above asking price in Kitsap right now. (Follow the weekly ups and downs right here.) The vast majority are going for at least something above average - and high demand homes (think 3-4 bedroom homes with multiple baths, yards, desirable neighborhoods . . . your basic "family home") . . . are often going for even more. You need to have cash reserve for this overage, in case the home does not appraise for as much as you offer. In that case, the bank will not give you a mortgage for that higher amount. You can pay it, but it must come out of pocket. Some sellers are reluctant to take these extra high bids, worried that the deal will not close due to appraisal issues. If you can show adequate cash reserves, your seller will feel you have a much stronger offer.
- Do you have confidence in your employment situation? This is double sided. If you think you might need to change jobs in the next year (but are confident in stable income) you might want to consider buying now, so your existing longer term employment is what your lender will consider. If you are worried you will have significantly less income before long, you'll want to consider whether owning will be cheaper than continuing to rent - a situation many find themselves in right now, due to a very high rental market. You cannot wait until you have lost a job, to buy a home with a mortgage. Your lender will want to see a steady employment history with verifiable income. On the other hand, if you are expecting a good increase in income and wish to devote some of that to a larger home, it's probably best to wait.
- Can you afford the monthly costs and maintenance on a home? We offer a handy mortgage calculator so you can estimate what you'll be paying in a monthly mortgage - and the internet is full of articles on home maintenance. The latter is harder to predict, though - it's hard to know what will need your attention in any given year. Expenses also vary dramatically according to how handy each homeowner is with DIY projects. Some people literally do not like to change light bulbs. Other people will happily re-frame walls and tackle roofing. It's important to do some research on costs associated with common upkeep, and what types of things you expect to have to hire out. Also consider what sort of budget you might need if you buy a fixer-upper. This sort of home can be very satisfying, but be sober about the unseen costs involved with buying this kind of home.
- Do you believe the type of housing you need will be stable for the next few years? If you think your family size or at-home needs will shift in the next couple years, you might want to wait - or at least, shop for those needs now. These categories of buyers include people who might marry or divorce soon, or who might add to the number of children in the house (or send one to college.) Perhaps a family elder might move in, or an adult child might move back. Perhaps you have a house with a lot of stairs, and will be needing something easier to get around into accommodate aging needs. If you KNOW things will shift in a year or two, it can be better to wait simply because it can be hard to recoup the expenses of selling a home shortly after you've bought it. You won't have built up much equity to put towards the second purchase yet. This is an item which varies dramatically, so be sure to talk it over with your real estate professional before drawing too many conclusions about your own situation though
We can suggest a few more current articles to read through as you contemplate your own decision:
- Are You Ready to Buy a House? by Investopedia
- Who Should Buy a House in 2021, and Who Should Wait? from The Mortgage Reports
- How to Determine If You Should Buy a House from Rocket Mortgage
- Should I Buy a House Now or Wait? by Prime Mortgage
At Dupuis Team, we are always happy to sit down and have a long chat with you about your own circumstances and the factors that might influence your own decision. Information is what helps quell the anxieties of "should I or shouldn't I?" type decisions in life, and real estate is no different. Give us a ring today!