The real estate market is cooling, mortgage rates are jumping and home prices are staying relatively high in many metro areas. Yet in the wake of the pandemic, housing specialists say 2023 could present a genuine opportunity for some young families to buy a brand-new house in an outlying area.
Though many so-called workers” have been called back to their offices in metro centers, others still enjoy the freedom to reside in a dream setting in a small town or rural area far away from their employers’ offices.
Take the case of a 28-year-old medical researcher who works as a data analyst for a Philadelphia hospital. After COVID-19 struck, she and her consultant husband took a rental in rural Pennsylvania, where they can work from home and raise their baby boy in a bucolic valley. Now they aspire to own a new property in the same area.
“It’s like heaven living here. Luckily our bosses say we can keep working remotely for the indefinite future,” says the consultant, also 28.
Such untethered workers are among the most motivated would-be buyers, says Glenn Kelman, the CEO of Redfin, the Seattle-based real estate brokerage.
“Despite more expensive mortgage money, there are some reassuring elements for buyers in the current real estate landscape,” says Eric Tyson, a personal finance expert and co-author of “Home Buying For Dummies.”
One reassuring element is that homeowners are starting to moderate their asking prices more quickly than in past housing downturns.
“Sellers are getting realistic a lot faster than before,” says Ryan Gorman, CEO of Coldwell Banker, the national real estate franchise based in New Jersey.
With their aspiration to purchase a brand-new property, the Pennsylvania couple have reason to believe they will fare better in 2023 than they would have during the pandemic, when newly constructed properties were in exceptionally high demand.
“Builders continue to face lower buyer traffic due to declining affordability conditions,” says Jerry Konter, chairman of the National Association of Home Builders (nahb.org).
Konter, a builder in Georgia, notes that across the country, new home sales are down 14.3% on a year-to-date basis compared to 2021.
To take full advantage of the positives in the current real estate market, housing specialists advise buyers to define their dreams before shopping for property.
“Think through carefully what’s truly important to you in a neighborhood and a house. Also, pin down your affordability range,” Tyson says.
Here are a few pointers for buyers:
-- Open your research with an early visit to a mortgage lender.
Realtors with experience are quick to identify those who claim they’re candidates for an upscale house yet can’t even afford a more modest place. Sometimes they decline to show them property of any sort.
Though very few would-be buyers are delusional, Richard Courtney, a Nashville-based real estate broker and author, says most need to see a mortgage lender to set a ceiling on what they can afford. That way, they won’t waste time looking at properties above their reach.
-- Think through your true preferences before starting your search.
Once you know how much you can afford, it’s time to reflect on your true wants and needs -- and to do so with a spouse or a partner if you’re part of a couple.
Tyson suggests you retreat to a tranquil space, shut off your phones and discuss your priorities in a focused way.
“All homebuyers -- except the ultra-rich -- face tough tradeoffs. They’ve got to compromise more than they’d like because property prices have outstripped their income gains,” he says.
Would you rather have a two-car garage or a fourth bedroom? Would you opt for a smaller house on a bigger lot or vice versa? These are questions no real estate agent can answer for you.
Of course, you may ultimately purchase something quite different than what you had in mind during your initial soul-searching session. But you’re less likely to make a huge mistake if you’ve thought through your goals from the outset.
-- Disclose your authentic reactions to the homes you visit.
“Unfortunately, some buyers are so fearful of offending their agents that they suppress their true reactions to property they’re shown,” Tyson says.
But to avoid taking you further off track, your agent needs to hear your negative reactions to properties you don’t like.
Do you feel cramped in a home with eight-foot ceilings? Does a townhouse development with a communal parking lot seem unpleasant to you? Then share these responses with your agent.
“Yes, agents can surmise some of your reactions by noticing your body language. But don’t expect them to read your mind,” Tyson says.
-- Allow a trusted agent some latitude to pre-screen properties for you.
Although you want your agent to be guided by your preferences, it’s also wise to allow the agent some leeway to occasionally add in a wild card. This is a home that your agent thinks you might like, even though it doesn’t meet all your search criteria.
Agents who are in sync with their clients’ reactions can sometimes guess when they’ll like a particular property -- even one that doesn’t sound right on paper.
“I’m not surprised anymore when people buy a place that bears little resemblance to what they first said they wanted. They didn’t lie. They just changed their minds,” Courtney says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)