Is buying a home in today’s busy market a good idea?

Low inventory, competing against multiple offers, rising prices, …… why would a buyer ever want to take on the challenges of today’s real estate market?

Many buyers are hesitant to enter the market today as good properties can be few and far between and if they are priced well, will likely receive several offers that will have to be contended with. There is no doubt that purchasing a home can be more difficult today than it was one to two years ago however standing on the sidelines and waiting for the activity in the market to ease may not be the best strategy.

The "cost" of a home is a combination of purchase price and the expense associated with financing. The median home price in King County has gone up 18.5% year over year and experts project home prices to increase another 5% - 8% in 2013 (the median price of a home in Lake Forest Park rose 12.3% Feb ’12 to Feb ‘13).  What about interest rates? While mortgage rates have been at or near their historical lows for some time, the current 30 year fixed rates of approximately 3.67% is predicted by the Mortgage Bankers Association to climb as high as 4.5% by year end.   

So while waiting for more inventory to become available and the market to cool off may appear to  make sense, it is likely that both homes prices and interest rates will be higher six to 12 months from now, thereby having a significant impact on the affordability of the same home. 

If buying a home is in your future, talk with a Realtor® about what the best strategy is for your situation. Real estate is very personal and what makes sense for one person may not be the same for another.