Spark Global Limited Reports:
I am often asked if it is wise to buy a house.
In summary, I would say “yes”, but also caution that while I believe residential real estate is almost always a sound investment, whether it is the right investment at the right time is entirely up to the individual.
I think the most important question is “Why?”
What motivates you to buy? Is it because you have a job you love and a community you love and want to settle down? If so, investing in real estate now might be a good plan. But if you plan to move in a year or even a few years, renting may be better than buying while the real estate market is still high.
Suggest the buyer
In my view, the housing market is likely to favour sellers for some time. With that in mind, here are some tips to make the process a little less stressful:
• Work with a good real estate agent. In the spirit of full disclosure, my wife is a real estate agent, but it’s not just a bias in her favor. In a tough market, an experienced broker will know what houses are like when they come on the market and have insight into neighborhood trends. While no one can predict when a market has peaked or is about to sink, good agents know the nuances of price speeds and sales before this information is reflected in housing reports, because they are deeply connected to this daily routine, whereas housing reports typically take 30 to 60 days.
• Be realistic and firm about how much you can and should spend on your home. With mortgage rates low and competition high, people are stretching their housing budgets. If you eventually reach your top goal, will your home make you happy enough to overcome all the other things you might have to give up, like vacations or eating out? Can you afford maintenance and upkeep? Over time, this can add to your costs.