best strategy to buy a property in the next few months

3 years ago

Hi,

I am planning to buy a property (first-time buyer) in Chicago suburbs, and few things that we have observed are that despite Covid-19 impact on the economy.

- housing prices are very much the same as last year

- # of properties available in the market are a little limited

- sales cycle time (from coming to the market to going to contingent) is relatively short. e.g., houses that we were following were gone within a few days.

Online-experts suggest the housing market to nose-diving around Aug'20 till the end of the year, and then it is expected to recover. They predict that the market hasn't gone down yet due to mortgage forbearance support, allowing landlords to defer mortgage payments rather than declaring bankruptcies. Once this support is gone (around August this year), we should expect to see bankruptcies impacting the housing market

Please share your thoughts and experiences.

Thanks

Featured Answer

User

3 years ago

Property prices have not gone down because of low interest rates. Many of those affected by covid economics are renters. There is still a strong economic base, those who are working have not been able to spend their money on “entertainment/recreation”.

If you want to buy a home, you are competing with people with jobs and an increasing bank account.

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Comments (11)

Denita
3 years ago
^Stax is right.

However, in every market you will find a wide variety of motivation for selling. Some sellers are strong financially and won't capitulate and don't really have to move. Other sellers are in extreme financial distress and must sell. Then there is everyone in between those two extremes.

The first thing to do for you is to find the right lender to make sure you qualify for a mortgage if you aren't paying cash for the property.

Mortgage qualifications vary from lender to lender. Mortgage lenders can make the qualifications much more restrictive (called overlays) than freddie, fannie or HUD requires and big box banks are doing that over the last 6 months or so. There are other mortgage lenders, particularly non-bank lenders, that don't have these overlays. Once you know the maximum amount of mortgage for which you qualify, then you know to look for something under your max budget. This is key to finding the right home at the right price. Your buyers agent should be able to figure out which sellers are motivated to sell and which aren't. It's not always obvious to determine a desperate seller.
wacokid
3 years ago
I would wait to see what happens in the next six months before buying. Also, make sure you are aware of the property taxes on your home and find out how much they have been going up over the last 5 years. Chicago is in a terrible financial situation and will need revenue. Property taxes are always the first place they look. Good luck. This is just my opinion and I am no online expert.
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Stax
3 years ago
Follow Denita's guidance! She does not have an axe to grind!
doe somada
Original Author
3 years ago
buy why property prices hasn't gone down?
Stax
3 years ago
Well said, Jim Mat!
bry911
3 years ago
last modified: 3 years ago
Just my 2 cents...

From a purely financial standpoint, you should consider waiting. You are unlikely to regret waiting 6 months and it is possible you could regret buying now. I am not saying prices are going to go down, but uncertainty is uncertainty.

However, a house is not simply a financial investment. Value considers both what you get an what you pay. I would much rather overpay for a great house than get a great price on a bad house.

So if you find a perfect house I wouldn't pass on it because the market may go down, but I might be a little more picky today than I would have pre-Covid.
maifleur03
3 years ago
With the OP using the term "a property" I wondered if it was a home, a business, a rental property or what. No mention of what their concerns are only a open ended their observations on the economy.
Peetor Vanilin
last year
Hey there. Bringing this thread back to life. Congrats on planning to buy your first property in the Chi-town 'burbs.
worthy
last year
last modified: last year

Redfin

Y Charts

You wait, you pay! (Hindsight is 100%)
kudzu9
last year
worthy-

Good advice for everybody who is waiting for the housing market to go down so they can save money.