Well, I think that you all know that it depends on who you ask! There are some agents that will always tell you that it is a good time to buy a home. I think that it really depends on your long term plans. Let me explain a little.....
For example, I received a call just the other day about this topic. They have lived in their home now for about 4 1/2 years. They are considering moving up to a new home on the outskirts of town. They have met with an agent and the builder and were getting ready to put their home on the market. Now, they have updated the house on the inside with new carpet, appliances and paint, and overall the price that the agent gave them seemed to be fair to the seller. However, the agent told them that they would have to either a) get a bridge loan for their existing home or b) or agree to their "home guarantee" price, which is considerably lower than the market value. One of these two options must be done in order to start the building of their new home.
Now, this is not at all uncommon. Builders want to make sure that the buyers are qualified to be able to buy the new home whether their home sells on time or not. The problem is that most lenders are no longer so willing to qualify buyers for dual mortgages. It has become increasingly difficult to get these type of transactions to happen. Then there is the added pressure coming from the builders' agent, who is also representing the buyer, that is pushing them to take the much lower "guaranteed trade value" for their home. In our current market, most homes in their price range are selling within 2-3 months, but with school starting just around the corner, you just never know. The appraiser for the builder is saying that all of the windows in the house need to be replaced or it is worth much less in a trade value. Unfortunately, that bottom line just will not work for the sellers because it does not give them the down payment that they need in order to secure the new home.
So, in this case, maybe it is not a great time to buy for them. Yes the interest rates are low. And they are in a great area and have made updates to the home. Will the windows cause them to NOT sell? That is unlikely. My suggestion was for them to take a step back and not be pressured into buying a new home RIGHT NOW. They should list their home first, for a couple of months. If their home sells, they can offer on the new home to be built. They may have the inconvenience of moving twice, but that is a small price to pay to know that you won't feel forced to take someone else's price of your home. Call me today for your free home market analysis to determine if it might be a good time for you to buy!
Keep smiling,
Karen