When Is The Best Time To Buy A Home In Placer County

Dated: 07/24/2018

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When Is The Best Time to Buy a Home in Placer County?


Contract Signing



Buying your dream home — whether in Placer County or elsewhere — should not be an impulsive decision. Purchasing real estate is a large investment and every consideration should be taken to ensure you are making the best decision. Many prospective homebuyers may wonder when is the best time to purchase a home and is there a time that is better than another? Let’s take a look at several aspects of home buying you should consider. 


The Market


If you are in no rush to purchase a home, one of the first things you should consider is the current housing market. The market is constantly changing and you want to move forward with the purchase when the market is best for you. To determine the current market, consider the following:


Buyer’s vs. Seller’s Market: If you are interested in purchasing a new home, ideally you want to purchase a home during a buyer’s market. This is when there are more homes placed on the market than there are buyers for these homes. This means homes will sit on the market for longer periods of time and there is less competition for buyers. It also gives buyers more negotiating power. In many cases, buyers have more opportunities to place a low offer and have the sellers accept it. 


Inventory:  During a buyer’s market, you will have more inventory, helping you more easily find your dream home. In contrast, in a seller’s market, homes will typically be purchased very quickly and property will cost you more money. This makes finding your dream home a more expensive and more demanding process. 


Interest Rates: If you are thinking about purchasing a home, check the current rates of home loans. Over the past year, interest rates have steadily been  climbing in California and experts agree this trend is showing no sign of slowing down. Unfortunately, this means that the longer you wait, the more you may pay for your home. 


Time of Year


When purchasing a home, the time of year should be a consideration. Typically, many sellers will place their home on the market during the spring and summer months. This is usually the hot time in the real estate market and there are more housing options available. However, because of the larger inventory, there may be more buyers and more competition. Home prices may also be higher and you may have little negotiating power. 


If you are in no hurry to make your purchase, winter may be the best time for you to purchase a home. While there may be smaller inventory, this is typically a buyer’s market. Sellers may be desperate to sell their home and you are more likely to get a good deal. Also, because there are fewer buyers, sellers typically need to sell their home — they are not just trying to make money. This also gives you more room to negotiate and receive a great deal. 


Your Own Finances



Finances



Being able to actually afford a home should be one of the most important factors to consider when determining the best time to buy a house. There are many financial aspects that come into play and that you should consider before you begin seriously searching for a home. These include: 


A Down Payment: Most homebuyers will need a down payment for the home. Ideally, you should save up to 20% of the home’s purchase price. For example, the average home value in Placer County is $484,500. To provide a 20% down payment, will need $96,900. For many homebuyers, particularly first-time homebuyers, this is a substantial amount of money. Some loans allow you to place much smaller down payments, helping you drastically cut the cost of the home upfront. For example, an FHA loan only requires a 3.5% down payment. But, a smaller down payment means higher monthly payments and you must pay private mortgage insurance. 


A High Credit Score: A high credit score is necessary to receive approval for a mortgage. This score tells the lender that you are not a risk and that you have strong financial habits and behaviors. The credit score you need will vary by the type of loan you choose. However, the higher your credit score, the lower interest rates you will receive. If you have a low credit score, it may not be the ideal time to purchase a home until you can improve your score and lower your interest rates. You can improve your credit score multiple ways by paying bills on time, paying off debt, and correcting any errors you may have on your credit report.  


Your Monthly Income: Before you purchase a home, it is vital that you take a careful look at your monthly expenses. Not only do you need enough money to cover the monthly payment, but there will be additional expenses you must consider as well such as home insurance and taxes. 


Maintenance and Repair Costs: Homeownership involves many expenses. Maintenance and repair costs for a home will occur regularly and unexpectedly. Many professionals suggest that you budget at least 1% of the home’s purchase price each year for maintenance and repairs. For example, for a $500,000 home, you should plan on $5,000 in maintenance and repair costs annually. As you look over your budget each month, make sure money is set aside to cover these expenses so you’re not left in a difficult position if something breaks. 


Talk to a Real Estate Agent


If you want more information about the current market, inventory, and timing, talk to an experienced real estate agent. They can provide information on local neighborhoods, inventory, interest rates, and more. They can also answer many of your questions and help you determine the right time to actively begin the house hunting journey. 


If you are interested in buying a home, contact a professional agent on Roger’s Real Estate Team. If now is the right time to buy a home, they can help you find your dream home, guide you through the buying process, and ensure you walk into your home happy. 

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