The Myth of the Perfect Time to Buy a House

I grew up with a real estate agent mother who was constantly on her phone as she carted my sister and me around.
Quite often, Shannon and I would be fighting in the backseat. Mom would turn around and, in her demon voice, say, “If you two don’t stop, I’ll come back over this seat — ”.
Only for her phone to ring, with her picking it up, and in her angelic voice, saying, “Hello! This is Jan!” I always loved that switch. It still makes me smile.
On so many of these calls, I heard mom saying, “It’s a great time to buy!” I heard this phrase for years on end, and began to think there was no such thing as a bad time to buy.
Decades later, I was selling my house and people said, “Oh it’s a sellers market! You should get a great deal!”
Yet — I was also buying a house in that same area, and ended up going way over budget for my next house. So whose market was it really? The language can all get muddled up and it can be hard to understand what’s really going on. Is there a perfect time to buy a house? Here’s what I’ve learned as an investor and analyst in the industry.

Where we are now

After the pandemic, pent up demand was finally unleashed upon the markets, driving up inflation in nearly every sector — real estate especially.
Counter measures by the fed brought inflation down, but left us with a market where homes just aren’t selling for high prices anymore. The current 30-year-fixed loan is 6.88% and 15–year-fixed is at 6.34%. Buying a $500,000 home at that 30-year rate creates nearly a $4,000 monthly mortgage with taxes and fees. With all costs included, you’d spend roughly $725,000 to pay off the home across the life of that loan.
Here in Florida, the median days to sell a house is 63, which is six days higher year over year. Back in 2021, it was a mere 24 days. My real estate agent at the time said it was the craziest market she’d seen in three decades within the industry.
But today’s languishing market is evident all around us. The townhome behind me has lowered their price three times (which will impact my home’s price in the long run). It has been excruciating to watch as the house has been up for sale now for months. Two years ago, they’d have invoked a bidding war to land that home.

Is now a good time to buy a house for anyone?

Absolutely. If you are carrying significant equity and can pay for the house in cash, or a large portion of it in cash, you position yourself to get a better deal than ever.
But a market isn’t a singular entity with one answer for every buyer. System dynamics are at work, with many nuances and factors that impact prices block by block, school zone by school zone. In short, a house tells its own story and will have its own sales journey.
Per Dr. Chris Herbert, director of Harvard’s Joint center for Housing studies, “You ought to be making this as a housing decision and not an investment decision.” Moreover, you should buy a home you want to live in for at least five years, or many more. This way, even if prices fluctuate, you still have a much better chance of seeing your investment grow in value over time.
Which also echoes my approach used as a financial analyst. Yes, timing matters. You don’t want to get caught in an obvious hype bubble or be engaged in overzealous bidding wars over a house (where winning can often equate to losing).
However, if you are obsessively trying to time the market, you’re setting yourself up to get a walloping. There’s rarely this magical moment when prices dip so low that you hear a bell ring and realize, “OK! Now is my moment!”
You’ll often be stuck waiting indefinitely and not pull the trigger. Or, you can end up buying way too early during a downward slide.

The key thing with buying a house

It should be a personal decision. And if you are in a turbulent marriage or partnership, think carefully before putting both of your names on a deed together. You can unlock all sorts of problems that aren’t easy to resolve.
That said — please be prudent. In the people I’ve helped, I can’t tell you how many otherwise sane, rational, sober, intelligent people — have gone on to buy exorbitantly priced houses that cleaned them out each month. I know one couple who literally bought a house that forces them to dip into savings each month, and they knew this would happen before they purchased.
Build up equity in your home. Have a goal of zero debt — so that you can get as many names off of your paycheck as possible and not be at the mercy of interest rates.
Just two years ago, we had a major shortage of houses here in Tampa and prices were skyrocketing. Now, prices are dipping and people are having trouble turning these properties over. But remember that every city is different. For example, Denver, Raleigh, and Virginia Beach have huge demand right now.

The grey area

If you are buying with a heavily mortgaged purchase, and have an unstable job or income, this is probably not a good time to buy.
At the same time, prices are dropping in many areas right now, and if you are looking for a shorter commute, or extra square footage, this could be an opportune moment to seize.
Inventory tends to go up in summer and drops off during the winter. It makes sense as most people don’t want to uproot their kids in the middle of the school year. You can find better deals in late fall early spring for this reason, but you’ll have fewer options if you are picky.
I recently heard someone say, “I’m going to wait until rates drop to buy my house.” That’s sound logic. But just remember that when rates drop, that’s also when demand spikes as people begin buying, driving housing prices back up. So if you do that, make sure you jump on it the exact moment rates go down.

A few parting tips

I’d caution you to always, always get a home inspection (many people don’t). If you buy at a good price, but there turns out to be a structural deficiency, you could easily get cleaned out and lose all gains.
On my house, I coughed up the $400 for an inspection, and they ended up catching a major defect (the water proofing of the home). It required a complete rebuild of the balcony and several exterior components that would have cost me over $100,000 to do on my own. But because of the inspection, we caught it and could hold the builder accountable.
And this is especially true with new construction. It is a massive misconception to think that a new home is like a new car, which has undergone the same QA standards as a vehicle in a factory. Local officials certify these homes after a quick glance.
Above all, remember that there’s never a “perfect” time to buy a house. But if you follow your values and goals, and take care of that new house, it will be one of the best storers of value available to you.
And always, always, get an inspection.