Have you been waiting for prices to go down at the Shore? You're not alone. Over the past couple of years, both across the country and in Cape May County, countless prospective home buyers have been trying to time the market. In reality, prices have only increased while fewer listings have come to market. Here is 2022 compared to 2021:
Here are some more specific, by-town numbers:
Why trying to time the housing market is a terrible idea
In the topsy-turvy housing market of the past few years, many homebuyers might be tempted to “time the market,” where they try to purchase property right when prices dip rather than peak so they don’t end up overpaying for a house.
Every real estate agent has watched buyers decide to wait because they assume prices (or mortgage rates) can only go down from where they are. The results, however, are rarely in their favor.
On the flip side, some homebuyers do the opposite, where they rush to buy a home that isn’t ideal because they assume prices (or mortgage rates) will continue to surge.
“It is not a good idea to try to time the market,” says Danielle Hale, Realtor.com® chief economist. “No one has a perfect view into the future. Whether you think rates or prices are going up or going down, the world may not evolve the way you expect it to. We all have to make decisions with that uncertainty.”
Why fear of overpaying can paralyze homebuyers
To be sure, market conditions always shape the decisions of homebuyers to some extent. Prices have risen over the past few years, and more recently, mortgage rates increased as well. At some point, this meant that certain buyers simply couldn’t swing the monthly payment needed, and no longer qualified for a home loan.
However, homebuyers who are clearly on solid financial footing but simply worried they might overpay in a heated market are in a different camp—and might sorely regret letting their need for a real estate deal keep them on the sidelines.
Many buyers are stuck in limbo, waiting but watching prices, betting that they might cool a bit more.
For anyone fearful of such a scenario, it might not be as bad as you fear.
“We know from surveys that overpaying is one of the big fears homebuyers have,” Hale says. “It’s easy to imagine that this fear is especially pronounced when home prices continue to hover near record highs.”
And while home prices are expected to soften a bit this year, stubbornly high mortgage rates might keep the cost of housing high regardless. Homebuyers should not expect to find deals in 2023, and the sooner they accept this, the better.
A moderation in home price growth will not be enough for the housing market to be a buyer’s market. If home shoppers and sellers have unrealistic expectations, they could find themselves in a stalemate in the year ahead. The 2023 housing market could become a "limbo market", not particularly friendly to buyers nor to sellers.
So when is the right time to buy a Shore house?
In today’s bargain-hunting culture, the urge to hold out for a deal is understandable. Yet while this “buy low, sell high” approach might work fine with stocks or luxury goods like a flat-screen TV, it does not translate well to real estate transactions. Why? Because a home is something that’s typically bought or sold based on day-to-day realities—Is it located close to your job? Is it big enough for your family?—not where the market’s at at the moment.
So instead of obsessing over the market, try to keep your eye on the real prize, which is your own personal living situation. Owning a Shore home brings many benefits, including profitable rental potential, building equity instead of paying someone else's mortgage on a rental, the ability to customize your Shore home, and your own home in which to make memories with friends and family that will last generations. Search All Shore Homes Here!
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