I met with new clients the other day and I wanted to share what I told them about buying a home in today’s market.
Over the last few years, the concern has been: how long can this market sustain itself?! Prices have just about doubled in the last couple years. It’s great for those who own but hard for those who wish to own. We all know the market is cyclical. It goes up and down, up and down, up and down. For the last couple years we have been on the up. Have we reached the top? Maybe. I don’t have a magic crystal ball. But I do know the housing shortage is real. That is why property values are still so strong because the demand outweighs the supply/inventory. Once the demand drops, the property values will fall. GOOD NEWS! I don’t see demand changing unless something drastic happens in the world. But I would say Covid was pretty drastic but here we are!
Regardless of the domestic and global economy, I would NEVER discourage someone to wait to buy. Life is short and when it’s abundant, take advantage when you can. Interest rates will fluctuate, but for most buyers, a percentage here and there doesn’t change the need for a home. It may affects their wish list and/or budget but not the actual need. Although I would not discourage to buy, I will guide you to making a better investment.
So if you decided you want to buy a home in today’s market, I suggest you think of the following:
1. Choose a home you can see yourself being happy with for 5+ years. The 5+ is just a number I threw out there, but plan to own for a while. If there is a change in the market, you don’t feel pressured to buy because you’ve outgrown or only planned to own short term.
2. If you understand the above and still wish to buy, buy something with rental potential. Rental demand in Ocean City is strong and has been helping property owners offered their home for years. So if you ever get stuck upside down on your mortgage and you bought a home with rental potential, at least you can rely on renters to assist in paying your mortgage. With any luck, you won’t lose any of your equity and the lose will be offset by the rental income.
3. Lastly, consider the land value of your prospective purchase. And I don’t necessarily mean value in $, I mean desirable. Is it close to the boardwalk and/or beach? Does it include physical land? Those properties with land value are less likely to suffer huge ups and downs because the demand will always be there.
Spring is a great time to snag an Ocean City home. Supply is still low so it is imperative to have your ducks in a row when shopping.
#1) have a budget and get pre-approved.
#2) CLICK HERE to stay updated on the market.
#3) Get ready to jump. Homes are staying on the market a few extra days but when it’s priced well, it will sell within a week of two. So you cannot wait until Memorial Day if you really want a home for the summer.