Should you buy now, or wait?

Nobel Prize winner Paul Krugman predicts the future, 1998. Feel free to give my own prognostication the same weight

If you’re determined not to “over pay”, and who isn’t, I’d wait. It pains me to suggest that, since most of my business is devoted to representing buyers, and I hate to discourage their patronage. There are certainly houses available at decent value-to-market prices, and if you need to or want to move, it’s possible to sort through the chaff and find them, but bargains? Few and far between. For at least the past 12 years I’ve been able to find houses that, because they were originally overpriced, had languished on the market and acquired a loser stigma that made them susceptible to lowball offers. Most of those are gone now, swept up by the wave of New York refugee buyers whose primary concern is shelter, not value, and those price-compromised homes that are left are in what I’d consider inferior locations and unwise “investments”.

This assumes that we’re in a temporary market boomlet and not at the foot of a new plateau, and I could well be wrong, and maybe that pessimism misses the picture. I cautioned clients back in the early 2000s during that era’s sellers’ market, “the price may not be what the house is ‘worth’, but it’s what it will take to buy it.” Looking back, those who did buy then haven’t seen a huge increase in their home’s value, and some, especially those in the back country have seen some serious paper losses, but they have also enjoyed their house, raised a family in it, made friends with their neighbors, and, all-in-all, done alright. If they didn’t strike it rich in real estate well, there’s always the pink sheets.

So, rent vs buy is probably close to equal, but if your horizon if five-years-plus, it can still make sense to buy, giving care not to be swept away in this market enthusiasm, But don’t expect to find a bargain right now.