Smart buyers wait for a sale to buy what they want at a lower price.
Many real estate buyers jump into the market when they feel good about it and try to get out when sentiment turns negative. The shrinks call that “herd psychology” ~ when people do what everyone else is doing.
Acting sheepishly, however, may not be in your best interests.
Have you ever noticed that the really smart investors buy when everyone is selling and sell when everyone is buying.
It’s a good idea to ask yourself a couple of questions if you are considering investing in Boise real estate at the present time, including:
- What are the underlying economic factors for Boise real estate?
They are extremely strong.
We are not in a national recession, our unemployment rate is a little over 3% vs. the national rate of 4.7%, we are creating new jobs, people are still moving here, and this is a terrific place to live ~ so good, in fact, that Money magazine says the Boise area is the 8th Best Place To Live in the entire U.S.
- Will the Boise real estate market remain soft forever?
Obviously, there are no guarantees of future appreciation because no one can predict the future.
However, given the desirability of our area, our quality of life, and our comparatively lower cost of living vs. other areas, it seems likely that our real estate market will recover.
And, it may recover rather quickly after we blow off some of the froth in our market.
Our market simply grew too fast during 2004-2005, and we also experienced a tremendous influx of speculators in the lower end of our market, thereby driving Boise real estate prices to unsustainable levels.
We are now in a period of adjustment that will ultimately result in more affordable homes in the Boise real estate market.
So, the choice is yours ~ do you pick up a bargain when Boise real estate is “on sale”, or do you wait until everyone else has jumped back into the pool?
Let’s run some hypothetical numbers and consider the trade-offs of buying now vs. waiting for the Boise real estate market to strengthen.
As an example, lets consider a $200,000 home similar to one I now have listed in West Boise.
But, let’s forget about the 20-25% appreciation we enjoyed over the past couple of years.
Instead, let’s use what might be a worst-case scenario of (gasp!) only 3% annual appreciation, and let’s say you keep the home for 5 years.
In this scenario, that home would be worth $231,854 at the end of five years.
Using only a 2% annual appreciation rate, the home would still be worth $220,816.
So, you see ~ everything is not all doom and gloom.
For many buyers, this is a buying opportunity ~ a chance to snag a good deal while Boise real estate is “on sale”.
I wonder how many “I could have bought . . . . ” stories this market is going to generate in the next five years?