My advice: Don’t treat the timing of your home purchase like it’s a stock on NASDAQ. Yes, real estate is cyclical. Right now we’re in an uptrend. Are we back at peak levels seen during the bubble years, not even close when adjusted for inflation.
To better answer your question, it really depends on your goals, and your personal situation. How long do you intend to occupy your property? is this a stepping stone to a larger home, or will this become your first investment property?
I own units in both Lucera and Villa Vicenza, two complexes that were converted from apartments to condos during the boom, then suffered big time with foreclosures and are finally on the road to recovery. I cash flow on both those units, so to me, and mind you, one of them I bought in 2005 AT THE PEAK, it doesn’t matter what you pay if you plan to hold a property for a long time, and wait out any market fluctuations.
Another point to consider, when buying a home, there are two things you are shopping, the home itself, and the financing for the home. Most folks only pay attention to home prices, but forget there’s something else to consider, the interest rates charged for financing the home purchase. Right now, we’re still in historically low territory, hovering just below the mid 4s. The impact that a rise in interest rates will have on your buying power if you wait until next year, and say rates are 1% higher, could mean an extra couple hundred a month just to pay for the same home. Right now, you have an opportunity to seize on a really great interest rate that you can lock in for 30 years.
My advice, get in the game as soon as you can (I started while I was in college). Start building equity and lock in today’s low rates for 30 years. Use this home as your first rental when you are ready to move into a larger home in 5 to 10 years.
