Your Central Jersey Real Estate Resource

As the real estate market and economy remain in turmoil, many people are wondering about the future of home prices over the next several years.  While we hope for the best, the end of the tax credit, as well as rising interest rates, point to a gloomy outlook at best.

In a recent article, real estate expert Steve Harney pointed to several factors pointing to this outlook.  First of all, as with the last tax credit, there was a rush to purchase homes, followed by a rapid fade in demand (after all, if people decide to buy several months sooner, who will take their place?).  Second, with rates rising at the same time, affordability will go down, resulting in a drop in home prices.

According to Case-Shiller, we can expect to see a sharp decline into Spring of next year to the bottom, followed by a slow rise in prices.  On average, we can expect to see today’s prices again in November 2013.

The Bottom Line

Buyers – Waiting may mean a better price for your home, but it could also mean paying more per month in higher interest for the same home, as well as no tax credit.  If you can afford to responsibly buy before the credit expires on April 30th, its a great time to do so.

Sellers – If you’re thinking about selling your home, waiting till next year can be absolutely catastrophic if you are looking for a certain price.  If you can afford to wait several years (or are simply waiting for the market to drop, so you can buy something else at a lower price), then doing so may be a good idea.  However, if not, you’ll probably want to consider your move this year.

If you’re in need of an expert consultation in when to buy or sell a home, please contact me at cooper@jerseycoop.com or call me directly at 609-865-5877.