A newly married couple are finally expecting to move in together this month. But they’ve decided to rent for a brief period, advancing slowly and methodically toward a home purchase sometime next year.
Felipe Chacon, a housing economist with Trulia, the real estate research firm, doesn’t know the couple in this true story. But he’s not surprised they’re taking a wait-and-see approach to homeownership.
“There are a lot of headwinds hitting buyers right now. Affordability has been a growing concern for several years, and now mortgage rates are starting to pick up,” Chacon says.
“People ... know we could be due for a recession and ... hope conditions will be better for buyers next year,” Chacon says.
One potential sign that the strong seller’s market is starting to recede is that more owners are now marking down the list prices on their properties. According to a Trulia analysis, the share of sellers taking price cuts has shot up in recent months. Indeed, the number of cuts has now grown to its highest level in four years.
Meanwhile, sales of newly constructed homes fell sharply in September, reflecting a weakening in the seller’s market. And Lawrence Yun, chief economist for the National Association of Realtors (realtor.org), reports that sales of existing homes also dropped in September.
“This is the lowest existing home sales level since November 2015,” Yun says.
Here are a few pointers for potential homebuyers planning ahead for 2019:
-- Find an experienced real estate agent to help guide you.
People who are relocating, whether for a job change or to buy a more spacious place -- are well advised to search for an agent who has years of experience selling homes in any community they’re considering, says Tom Early, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org).
Before you start looking at specific properties, a strong agent will help you navigate the new locale, supplying you with data on home prices and valuation trends, relative school performance statistics and information on nearby amenities, such as parks and hiker-biker trails.
-- Avoid any agent who tries to rush you.
Although agents are compensated on commission, and therefore don’t make any money until a sale goes through, a reputable one won’t try to hurry you into a purchase before you’re ready, says Eric Tyson, co-author of “Home Buying for Dummies.”
“It’s a big red flag if an agent starts pushing you,” he says.
Of course, it’s not fair to ask the agent to spend multiple weekends over months showing you properties unless you’re progressing toward your goal of homeownership. Every veteran agent has had to cut ties with clients who looked continuously without any serious intention of buying.
Still, as Tyson says, it’s not unreasonable to spend up to six months doing intermittent (yet focused) outings with an agent before committing to a property purchase in an area that’s new to you.
-- Supplement your search with visits to open houses.
If you’re a long-lead-time buyer planning a major housing change, such as a move from a suburban house to a high-rise condo, you needn’t rely solely on your agent to help you sort through your choices. You can do much of the footwork on your own.
“By visiting a lot of open houses, you can narrow down what you do and don’t like in a home. Eliminating alternatives can be extremely useful in narrowing your search,” Early says.
Many open houses are heavily advertised with street signs posted by the listing agents for the properties. If you’re considering condo-apartments, however, Early suggests you consult local newspaper or internet advertising for open house details.
-- Conduct your own on-the-ground research.
As you develop a short list of housing alternatives, some of the most useful sources of realistic information are people who live or work in the areas you’re considering.
“People usually know their neck of the woods as well as any professional who sells property there. Unless they’re trying to unload their home, the neighbors will tell you the real skinny about traffic tie-ups, school problems and noise issues,” Early says.
What’s the best way to approach neighborhood residents? He recommends you walk through the community on a weekend afternoon when many people are likely to be out in their yards. Tell them you admire their neighborhood and are considering a move there. Then feel free to politely pose a few questions.
“If people start giving you the cold shoulder, you can bet that neighborhood is unfriendly. For that reason alone, you may want to drop it from your list,” Early says.
Those considering a condo may find it harder to chat with a building’s residents, though some may talk to you as they enter or exit the complex. Also, an agent who lists property in that building could line up resident contacts for you.
“People are remarkably candid about the places where they live, and if you approach them in a genial way, most will genuinely give you the context you need to help choose an amazing property in a very livable area,” Early says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)