The Buying Challenges in a Seller’s Market
A seller’s market exists when there are more buyers than homes for sale. Because real estate is a function of supply and demand, when there are fewer homes for sale, a rising tide raises all the home prices in the area. Homes in the most desirable areas, however, increase in value faster and they top out higher before the pendulum starts to swing back in the other direction. This is why it’s important to buy in the most desirable area you can afford.
In a seller’s market, when home prices are increasing dramatically, starter and mid-level homes become especially hard to find. Since condo units and townhouses are less expensive to buy and tend to attract first-time buyers, the market for these homes can explode.
Homeowners who buy during a slow, buyer’s market will see their investments skyrocket when the pendulum swings back into the seller’s zone. If you’ve outgrown your condo or townhouse, this is a good time to cash in and move up.
Once you’ve decided to throw off the shackles of tenancy, your first step toward buying a home is to look at your financial situation and ask yourself two questions:
- Is your job or career reasonably stable for the foreseeable future?
- Can you handle a commitment to making monthly payments for long term?
If you can answer yes to both questions, then it’s time to move on to the next step and find a mortgage lender you can work with.
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