In a nutshell, it means that while a few months before, you could afford the type of house you wanted (more or less), but prices have risen so fast that now you feel that you cannot buy anything at all. You feel that it’s no longer worth it to buy – so you continue to rent. And you continue to watch prices rise, both for the home you wish you had bought but also the rents over which you have no control. The gap between what you could have bought (but didn’t) and what you can buy now can mean the difference between feeling able to buy a home and not. When the gap gets too big, you are “priced out of the market”.
Have you been patiently waiting for just the right house to come on the market? It may not be forthcoming. It is very possible that while you watched the market last year, prices were getting primed for a rebound of sorts. It’s now underway and guess what? What you could afford a year ago is no longer possible today!
This is one time when waiting does not pay off!
Why do buyers wait when they might do better to jump in?
This is no time to fiddle and watch Rome burn. If you want to buy a house in Orange County and have been sitting on the fence, this may be the time to get off and dive in.
While I’m not a ‘pushy’ agent but an informational one this argument is an important one to pass on.
Almost every one of my clients says at one time or another – ‘I really blew it not buying that house years ago’. The reason they didn’t buy was they thought the market or house couldn’t go up any higher and there has to be a correction.
I remember when I first moved to Laguna in the 70s and people were saying I can’t believe that place sold for $200k, a perceived ridicules high price. Probably worth a couple million now.
But everything increases in price (even after a correction) and a new ‘price bar’ is set. You name it – stocks, cars, gas, tickets to ball games, meals at restaurants and much, much more – they all go lower during tough economic periods and then they bounce back with a vengeance, way past the level they were during the good times before.
And a new ‘normal’ price level is set and people get used to it and move forward. Hopefully, there’s a new ‘normal’ in pay as well.
The following is an example of what it could cost you in a year’s time if you waited another year to buy with rates going up:
It remains a strong seller’s real estate market in Orange County, with many properties selling quickly and at full price, but there’s an undercurrent of concern that we are the near the peak of pricing. That has some buyers nervous even with the local economy is strong. For those who are a little nervous, sometimes it turns into cold feet – and it’s costing them.
Oh yes there will be a correction sometime in the future but real estate economist say that it won’t be anything like the last one since mortgages are being written at a much higher standard.
Lastly, in an appreciating market, as we have right now, it should be noted that often the next house or townhouse or condo will be more costly or in worse shape than the one you could not decide to get serious about. Stay nervous too long, and you could ultimately really impact how much home you can buy at all. Worse yet, take too long and you may price yourself out of the market entirely.