What Could He Possibly Mean?
“This is the best time to sell in the next 5 years and it is the best time to buy in the next 5 years.”
Dave Ramsey, June 9th, 2022
If you have had any experience with the real estate market over the past two years, you know it has been HOT competition between buyers and the market has been heavily tilted towards sellers. With home prices in Oklahoma City up over 30% since May 2020 and mortgage interest rates jumping from 3.25% to 5.75% over a couple short months, most people see the pressure and think “I need to wait until the market cools off a bit before I buy.”
Not Dave Ramsey… In the clip below, he says the following:
“I would say for the next 6 months this is going to be true (and you can’t usually say this): that right now is the best time to buy a house in the next 5 years. Right now.”
What? Come on, Dave. Nobody believes that. How could that make any sense? He goes on to explain:
“Prices are not going to come down… They’re going to go up slower, but they’re not going to go down. They may not go up hardly at all, but they’re not going to go down. So 5 years from today, houses are going to be more expensive. This is as cheap as it’s going to be in the next 5 years. So, this is THE BEST price right now if you’re going to buy a house.”
But what about the interest rates?!? At almost 6%, they are crushing us right now, Dave! His response:
“Buy the house. If interest rates come back down, refinance. But don’t not buy waiting on interest rates to come down. Just refinance the mortgage if interest rates come down. This is THE BEST time to buy in the next 5 years.”
Dave knows that even though mortgage rates feel high compared to where we’ve been recently, they’re NOTHING like the high mortgage rates of 18-19% in the late 1980’s, the last time the Federal Reserve was fighting hard against inflation… As hard as it is to believe, I think these may be some of the BEST rates we are going to see for the next 5 years!
But wait, Dave! Isn’t the housing bubble about to pop? Haven’t we had unsustainable growth that’s going to come tumbling back down?
“It’s not a bubble. Homes went up artificially faster... The rate of increase is different than the price. How fast they are going up is a bubble, but not the price.”
How can he say that? You see, Dave has the perspective of the 1980’s. That’s when he got his license and started selling real estate as an agent, so he’s not as blinded as we are by the 2008 Market Crash. He has seen hot markets with a very different ending.
And just in case you sellers out there think he’s not talking about you, Ol’ Dave has some words for you, too:
“This is an unusual market. We are kind of at a midpoint. There’s a tipping point thing going on.” [where the market will shift from favoring sellers to favoring buyers].
Okay, Dave… so what does that mean exactly for sellers?
“Here’s what’s weird: This is also THE BEST time to sell a house in the next 5 years. Why? Because we still have a semblance of the crazy white hot market around. It’s really just vibrating... If you’re a seller you really have a real hot commodity right now. If you‘ve got a nice house and you put it on the market right now, it will go, and it will go for a really good price right now. And it may not be that way 6 months from now. The market may slow down enough that as a seller, you may have to sit a house for a while to get a good price out of it. I don’t think you’re going to lose money 5 years from now… but you’ll have to sit on it a bit longer.”
As hard as it is to believe, I think Dave hit the nail on the head here. It’s not an easy market when you have to buy, but it’s well worth the effort in the long run. And if the market does slow down, momentum for selling in 6 months may not be what it is today.