- Unemployment is at historic low levels. This means people have money to buy homes, which pushes the prices higher as they currently are. The best time to buy is when unemployment is high…which means lots of buyers fall out of the market. At the same time, people are losing their homes due to unemployment so there is more inventory on the market…thus lower prices in due time.
- Interest rates are projected to increase even higher. This means most people can afford less “house” so there is less money sloshing around to push home prices even higher.
- China and other foreign governments are cracking down on people who keep assets offshore. They seem to be getting more aggressive at putting a stop to it. They want their domestic businesses/workers etc investing in the home country, not putting it abroad. China has a huge real estate bubble as is with overbuilding so you can see why they are getting more aggressive at putting a stop to it.
- Depending on where you are located, sales are declining, inventory is building up, and prices are marginally being lowered. This is a sign that there is a shift occurring in the market. Right now we don’t know if this is just a slow-down – as in prices will drop a little but mostly stay where they are at or if this is the start of another 20,30,40% drop over the next 24 months.
Overall, I would say number 1 and 2 are the main reasons you don’t want to buy. Better to buy during recessions. Don’t be persuaded by people who say to buy now because interest rates are lower. You can always refinance a high interest rate to a lower one when the fed cuts rates again like they always do.
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