An increasing number of wannabe homebuyers, many of whom have spent years saving for a down payment, are now pulling back to reassess, though only temporarily.
“People who’ve been stuck in rental units through the pandemic are itching to move. But they’re still reinventing their post-COVID lifestyles and want to be absolutely sure they make the right decision before they commit,” says Eric Tyson, a personal finance expert and co-author of “Home Buying for Dummies.”
Many renters believe it makes sense not to rush to buy, given the current climate. Though home prices are high and inventories of available property remain tight, housing analysts predict that a market more balanced between buyers and sellers is imminent.
"All signs point to the likelihood that the housing market is beginning to ease off the gas pedal,” says Nicole Bachaud, an economic data analyst for real estate giant Zillow.
She also expects that “the end of rampant price hikes may be on the horizon.”
One reason many would-be buyers who’ve already accumulated a sizeable down payment are holding off is uncertainty over their career trajectories. Because the pandemic remains a factor for many working people, it’s unclear where their primary workplace will be going forward.
Take the case of a 37-year-old public relations manager who’s been working from his two-bedroom apartment for 16 months. He has a hefty $200,000 saved for the down payment on a rural house with a yard large enough to raise three Bernese Mountain dogs. The only problem is the area he covets is a two-hour drive from his office, and he’s unsure if his company will allow him to continue remote work.
Tyson doesn’t know the manager in this true story. But he agrees that it’s prudent for the potential homebuyer to wait until he’s sure about his employment situation.
"No one wants to get locked in to a super-commute that steals your time and life,” he says.
Of course, some employees have already returned full-time to their pre-pandemic places of work. Even so, they’re still designing their future lifestyles.
Doro Kiley, a certified life coach who helps clients craft their plans, says that before launching a home search, buyers should first imagine their ideal habitat. That way, they’re more likely to get close to the best possible match.
“Always begin by thinking what you’d really like, as opposed to what you’d settle for,” Kiley says.
Here are a few pointers for buyers:
-- Outline your future on paper.
Partners often differ on ideal housing choices. That’s why Kiley says it’s helpful for both to write down their respective visions and then seek to shape them into a single statement.
Written statements help people clarify their thinking and refine the details of their plans as they move through successive drafts. They’re also a way to help reconcile differing views.
-- Pay close attention to commuting times.
Merrill Ottwein, who sells homes through a Coldwell Banker office, says one of the most wrenching tradeoffs many families face is between a larger, newer house with a longer commute and a smaller, older place that’s closer to a city center and the workplace of one or both partners.
Buyers who consider an outer-tier suburb are often driven by the desire for a larger property or what they perceive to be better schools.
But before you opt for a distant suburb, Ottwein strongly recommends you do morning and afternoon rush-hour test drives. This way, you’ll know more precisely what sort of traffic to expect if you live there.
Ottwein says buyers should disabuse themselves of the notion that the current level of traffic congestion on their path will remain static. The odds are that the traffic will worsen as the years go on.
-- Remember that your kids can thrive without a large yard.
Many people with young children hang on tightly to the hope that their kids will have a large backyard where they can play, just as they did as children. This aspiration can influence them to pick an outlying suburb at the expense of their convenience and commuting time.
But are the tradeoffs necessary to acquire a large piece of land worth it? Not necessarily, says Ottwein, noting that these days children often spend much more time in organized athletic and recreational activities than did their parents.
“Once the pandemic is behind us, kids will again become programmed to the hilt with team sports, music lessons and school events. They have little time for the sort of free backyard play their folks remember so nostalgically from childhood,” he says.
-- Take your time when shopping for the right neighborhood.
These days, many seeking to own a house in a popular neighborhood often continue to face rival bidders, though perhaps fewer than in the past. Because of that, many buyers take regrettable shortcuts, often rushing into a purchase without analyzing whether the property they’ve picked truly matches their lifestyle.
But because so much is at stake, Ottwein urges buyers to slow the process down or face the possibility of a mistaken choice.
“It’s always important to keep your eye on the ball when making a big financial purchase. You really won’t be happy if you win in a bidding war yet buy a place unsuited to your happiness,” he says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)