Should You Buy or Sell in Late 2024 or Wait Until 2025?

As we head into the last quarter of 2024, a common question on many potential homebuyers' minds is whether to buy now or wait until spring 2025. With rising interest rates, changing market dynamics, and the uncertainty of an election year, it’s essential to weigh the pros and cons before making a decision. Spencer Sue, a Bay Area real estate expert, addresses this very issue in his latest video, offering insights and strategies based on his extensive experience in the local market.

Pros of Buying a Home in Late 2024

1. Less Competition
   With many buyers sitting on the sidelines due to election-year uncertainty, those who decide to buy now will face much less competition. This can result in fewer bidding wars, allowing buyers to negotiate better deals and potentially avoid paying over the asking price. In contrast, high competition during peak times can drive prices up.

2. Favorable Interest Rates
   Despite the general rise in interest rates over the past year, recent months have seen a slight decline, especially for jumbo loans (now in the mid-5% range) and conforming loans (around the low 6%). This 19-month low, driven by anticipation of potential Federal Reserve cuts, makes it a good time to lock in a more favorable rate than what might be available in 2025.

3. More Leverage for Buyers
   Without heavy competition, buyers in late 2024 can utilize lower down payment options, like VA loans or FHA loans, without being at a disadvantage. Sellers, more motivated to close deals quickly, may be more willing to accept offers contingent on financing or to provide additional concessions, such as closing cost credits.

4. Discounts from Builders
   Builders often offer significant discounts or incentives at the end of the year to meet their sales goals. This could mean better deals on new construction homes, including closing cost credits or upgrades that aren’t always available during peak buying seasons. Spencer highlights that this can be a golden opportunity for savvy buyers.

Cons of Buying in Late 2024

1. Election-Year Uncertainty
   With the upcoming presidential election, the market is clouded by uncertainty. Many people prefer to wait until after the election to see how policies and economic conditions will shake out, which could cause fluctuations in the housing market. If you’re uncomfortable with this level of unpredictability, waiting may be your best option.

2. Fewer Homes on the Market
   Historically, there are fewer homes listed for sale in the late fall and winter months. This means buyers will have fewer choices, which can be frustrating for those with specific needs or preferences. However, for buyers who are more flexible, this could still be a great opportunity to get a good deal.

Pros of Waiting Until Spring 2025

1. Post-Election Stability
   By spring 2025, the election will be behind us, and the housing market may settle into a more stable rhythm. Buyers may feel more confident about making large financial decisions without the looming uncertainty of election-year politics.

2. More Inventory
   Spring traditionally brings a surge in new home listings, giving buyers more options to choose from. If you have specific requirements for your home, waiting until the spring could increase your chances of finding the perfect property.

Cons of Waiting Until 2025

1. Potential for Higher Prices
   According to several forecasts, home prices may increase in 2025. While interest rates are expected to continue declining, the heightened competition in a more stable market could drive prices higher, especially in the highly competitive Bay Area.

2. Increased Competition
   After the election, more buyers may enter the market, resulting in bidding wars and faster sales. Just as in 2021, a post-election housing market often sees a surge in demand, which can lead to higher prices and more appraisal risks. If you’re not ready to move quickly, you could be at a disadvantage.

Conclusion

Whether you decide to buy in late 2024 or wait until 2025 depends on your individual situation, including your risk tolerance, financial readiness, and flexibility in what you’re looking for in a home. If you’re comfortable navigating uncertainty and fewer listings, buying before the end of the year could give you a competitive edge with lower prices and interest rates. However, if you’re seeking more stability and a larger inventory of homes, waiting until spring 2025 might be the better choice. Either way, don’t wait until the last minute to get your finances in order and secure pre-approval for your loan.

Reach out to Spencer Sue for personalized advice and a game plan tailored to your needs. Whether you’re buying now or in the future, planning ahead is key to success in the Bay Area real estate market.