Top Real Estate Experts Answer: Are You Waiting To Buy?
Posted by Jeff Biebuyck on Tuesday, December 28, 2021 at 5:47 PM
By Jeff Biebuyck / December 28, 2021
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2021 has most certainly been the year of the seller’s market, with record sales, asking prices and equity gains across all corners of the country. While some media talking heads have warned of the potential of a market downturn, we turned to the real experts to answer a common question among buyers: Should I wait for the market to cool down?
“The real estate market is not the stock market. It just doesn’t drop 30 points overnight,” says Jeff Biebuyck, California Listings’ Calabasas expert agent and partner at FrontGate Real Estate. “We have clients that have been ‘waiting for the market to cool’ for the past five or six years.”
The “cool” may not be coming, but Biebuyck and partner Dana Olmes, instead point to value appreciation. The time that would-be buyers wait to make a move is simply a loss on the backend.
“The average median appreciation in our area alone just in the last year has been over 25 percent,” Biebuyck says. “If you are expecting to be in your home for over 10 years, do the math from your home’s value 10 years ago.”
A home’s value is the number Pacific Palisades expert and founder of Amalfi Estates, Anthony Marguleas, says buyers should be focused on in this market as experts don’t predict a decline in home values in 2022 or 2023.
“The historic and rapid growth in values due to COVID-induced market conditions created an environment where the median home value in the U.S. rose by 17 percent in one year,” Marguleas says. “Predictions for 2022 point to a much needed market stabilization where values hold and buyers can have a little breathing room. That’s a healthy market and it remains a great time to make your move.”
That breathing room doesn’t, however, mean depreciation. In fact, when it comes to this concept of the market “cooling,” a number of California Listings’ agents say the real news is that home value appreciation is decelerating—not declining.
“Economists are predicting a 6 percent annual appreciation over the next four years resulting in over 30 percent additional equity appreciation,” says Manhattan Beach expert agent and Stroyke Properties Co-Founder/Partner Bryn Stroyke. “So for your, say, $2 million price range that comes out to $600,000 of additional equity.”
So, does it pay to wait? No.
Biebuyck notes that with interest rates close to 30 year lows, mortgages can—and will—only go up from here. And while a 1 percent increase in the next year or two may not seem like much, that could add hundreds or thousands onto your future mortgage payment, while also missing out on a year or two worth of equity.
“Many people believe we are at the peak,” Stroyke adds. “Many thought we were at the peak a couple years ago and look what happened.”
Are you thinking about homeownership but need some advice?
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