Who says it’s a bad time to buy a Boston condo for sale?
In general buying, a Boston condo for sale isn’t a mistake. We all need a place to live and when we own we can build equity. It is even possible to own a Boston condo for sale long enough to pay off the mortgage. Mortgages generally don’t increase over time and are a hedge against inflation. Homeowners can count on taxes and insurance costs going up every year.
Buying a Boston condo for sale isn’t a mistake but buying the wrong one is. Usually, the wrong condominium is a condo that is too expensive and is in a neighborhood where everything is expensive. Too expensive is relative to income.
I have known people who have spent most of their income on that perfect home. As a result, they haven’t been able to afford home repairs or furniture. What we call it in the industry is being “house poor.”
Being house poor can have a huge negative impact on a family. Ideally, we shouldn’t spend more than 30% of our income on housing. Less than 30% is even better. Take other payments into consideration like student loans, credit cards, and car payments before making any decisions. Sometimes it makes sense to pay off some debt before buying a house.
Renting a Boston Beacon Hill apartment can be a great option for people who don’t want to be tied down. People who rent and who have extra money can invest it in all sorts of things especially if they can spend less than 30% of their income on housing. But the bottom line is buying a Boston condo for sale is a good long-term investment.
Here’s a sexy headline below:
That’s not my headline, it’s from CNBC.com.
Anyone out hunting for a Boston condo for sale knows that low mortgage rates have been low, it’s no longer the exception, but the rule. Demand for housing has been unusually strong outside of the Boston real estate market (suburbs), due to the coronavirus pandemic, and supply is historically lean. That is a recipe for high prices, which are now beginning to take their toll on potential homebuyers’ confidence.
The share of buyers who say they think it’s a good time to buy fell in September, from 59% to 54%, according to a new survey from Fannie Mae.
Home values were up nearly 6% annually, according to CoreLogic, a data analytics firm. More consumers now expect those price gains to grow.
The percentage of respondents to the Fannie Mae survey who says prices will go up in the next year increased from 33% to 41%, while the share who said prices would go down decreased from 26% to just 17%.
More people do think now is a good time to sell a home, which is an improvement from the first months of the pandemic, when potential sellers didn’t want shoppers in their homes and worried about the state of the overall economy.
If seller sentiment improves substantially, that could help bolster supply and take away at least some of the heat in prices.
“Going forward, we believe the wild card to be whether enough sellers enter the market to continue to meet the strong homebuying demand,” said Doug Duncan, Fannie Mae’s chief economist. “The home purchase market requires the proper mix of home price growth and continued economic recovery to achieve sustainable levels of housing activity.”
A bad time to buy? When you can get a mortgage rate under 3%?
In the local media, there’s a lot of talk about how downtown Boston residents are fleeing the Boston condo and the apartment market. I have some clients sitting on the sidelines waiting for Boston condo for sale price declines.
But be careful trying to time the market. Any possible declines in home prices will be offset by higher mortgage rates, so there won’t be much if any, savings in your payment if prices did come down – but fewer people in the survey think that’s going to happen. You would pay lower property taxes, however.
Saying it’s ‘a tough time to buy’ would be more accurate. Finding the right Boston condo, at the right price, is extremely difficult – but many signs point to the supply increasing next year. Stay engaged, regardless of what the talking heads tell you about the general market. You only need one!