The later part of this year might bring about some stabilization in the way of a more balanced market, but don’t expect one favoring buyers anytime soon. As inventory shortages continue, and they will, prospective homebuyers are attempting to determine if they should stay in the game. Others have doubts and aren’t sure if they should join the quest for homeownership either.
The anticipation of homeownership can be intoxicating for some. Recent months have been a prime example of this in our region of Northeastern Pennsylvania. With homes sold on par with the previous year (843 versus 853, respectively)*, and inventory struggling to see the light of day (1.29 month’s supply),* there’s an element of hysteria to real estate transactions these days. Certainly the pandemic was a catalyst for the surge in activity, but make no mistake about it, our housing supply had already been depleted prior to 2020.
Before we reveal why now is a good time to buy, there are a couple reasons we caution some to re-evaluate their situation before purchasing a home. These reasons include those facing upheaval in their lives, those who must remain nomadic for the sake of their job as well as anyone who struggles to cover their monthly expenses. If your life is a little frantic today and you’re going through transitions, purchasing a home might not be the best course of action. If you’ve undergone more change than you care to admit, renting may provide you more freedom and less stress. It’s also favorable for those who need to move promptly due to work. Homeownership can only create headaches for these successful itinerant types, who could potentially sit on the sidelines waiting longer than expected for their home to sell. Finally, owning a home comes with maintenance, presumably a mortgage, taxes, insurance and occasionally other fees/costs. If you presently grapple with covering your expenses and debt, purchasing a home isn’t a path you should pursue until your situation changes for the better.
Obviously, renting in particular situations just makes sense! Doesn’t a seller’s market, the likes of 2022, qualify as one of those instances? Not necessarily. In fact, since the “lockdown dam” ruptured in June of 2020, rents have been rising too.
Yes, glaring issues in our economy such as inflation, the increasing costs for food/gas, among others, create barriers to buying (we can’t minimize them), but opportunities exist for those looking to enter the market, especially for the first time. They remain even in the midst of a supply shortage.
Homebuyers, now is the perfect time to pursue homeownership, especially if you don’t need to sell and your rental rates are continuing to climb. Purchasing property is advantageous, and in the majority of cases, will be the smarter play over leasing. Here are the top three reasons why purchasing a home (or likewise, continuing to own one) now makes sense.
Because the landscape for buying and selling is more volatile recently, having a meticulous plan of approach is essential. Before you commit to taking on a mortgage, understand your finances and prepare them appropriately. The first step toward investing in your future in real estate is stability. If you’re grounded in your finances, with trace amounts of bad debt in your name, and you have the ability to afford a home at a particular price point in addition to the closing costs that are associated with it, you’re in a good position to invest. If you have a nest egg or emergency fund, you’re in a superb position. Of course, having excellent credit gives you a competitive advantage and firmer stability still.
You’ve Been Squandering Your Extra Money
If you’re looking for safer places to store your loot, you should strongly consider building equity by purchasing a home. Homeownership forces you to produce equity. On the other hand, renting makes it easier to spend your extra cash rather than invest it. The money you’re putting into a home will come back to you as your property appreciates over time. In 2021, we witnessed homes appreciate by roughly 19% and they should sustain 5-10% through year’s end. Housing appreciation in the Greater Scranton area registers 13.1%, year-over-year for the April.* According to the latest numbers from CoreLogic from March, homes have appreciated by 20.9%, year-over-year. It’s a great time to make an investment in a home!
Feel At Home
As a result of owning property, you can create something that’s truly yours. Would you like to renovate? You can. [Make sure to check with your local municipality/borough first.] Want a bigger say in lifestyle decisions? Make them for yourself and your family. Need increased privacy? You’re in the driver’s seat. You can make additions to your property to make it more secure. You can erect shrubs and fences. Alter the landscaping or design of your residence, because you can – you’re captain of this ship. Don’t worry about the logistics! Homeownership means less restrictions and limitations and more freedom.
Why not own a place you can call home, when it’s all said and done? As a prospective homebuyer, especially a first-time one, you have the ability to invest in your family and create a foundation to build on, for their stability too. What’s more, homeownership statistically creates a better environment for children. There are many intangibles produced when a child has a safe and affordable place to live. Furthermore, homeownership drives your local economy and has the potential to enhance your community. For every two home sales, one job is generated, increasing economic mobility.
If you’re looking for housing, don’t give up hope. Our region might be slightly oversaturated with buyers, but that continues to improve. What we can expect six months from now is anyone’s guess, but we’re approaching a more balanced market in the months ahead. At the moment, it’s a great time to buy, and if you’re in the position to do so, will you take the steps necessary to join those who find homeownership very rewarding?
* statistics from the Greater Scranton Board of REALTORS®