I recently read a blog from my friend Bob Schwab, a certified mortgage consultant with Finance of America, that had me thinking. It’s about how the median home price in the fourth quarter of 2018 was the least affordable level since the third quarter of 2008, according to statistics from ATTOM Data Solutions.
But, it’s not all doom-and-gloom on that front. Nationally, 58 percent of counties analyzed by the data report recorded an improved home affordability ranking on a quarter-over-quarter basis. According to Daren Blomquist, SVP at ATTOM and quoted in Bob’s blog, “home price appreciation falls more in line with wage growth,” and “high-priced areas such as San Diego, Brooklyn, and Seattle saw annual wage growth outpace annual home price appreciation.”
Here are my two cents on this, and about what it means in the local real estate market: You can’t time the market. Buying over renting is always a better long-term strategy. I have had buyers looking this December and were able to quickly get into a home that had some healthy price reductions (really it finally just got priced right) and we have been able to negotiate on repairs. They also found a home that was about $70k below their top end budget. They were motivated, they just had a baby, wanted a house, and were very methodical. They will simply build equity just by paying their mortgage every month and doing some improvements.