Last Updated: October 28, 2022

What To Do in a Slowing Real Estate Market? To Buy or Not to Buy?

Written By: Barbara L. Pearce
Cartoon House

Everyone panics when they see activity slow, thinking that they don’t want to be the last chump that buys at too high a price.  This rarely happens, and it only occurs by chance—no one can plan to close on a transaction at the exact peak or trough of a market cycle.  While it is true that prices go up and down, it doesn't really matter if you are staying in the same area.  So, if you are selling your home at a lower price, and buying the next one at the same discounted rate, you are made whole.  If the whole country is in the same stage of a cycle, again, it won’t matter whether you take a little less, if you are buying at the same price point. 

If you are switching between regions, or buying something completely different on the other end (maybe condos are at higher, or lower, prices in your area, compared to single-family homes, for example).  Then you should do some research, so that you can be confident that what you are spending is at the “correct” premium.  Suppose that you are moving from a suburb to an urban building, where units are in high demand, and supply is limited.  You may certainly pay more per square foot, but you may have found that unit to be higher than your detached suburban home, even when the latter was going for more. 

The point is that, if you buy and sell in the same time period, you are clearly in the same part of the real estate cycle, and therefore price differences reflect supply and demand, not market conditions.  That can happen, no matter what interest rates are, or what towns/neighborhoods might be hot.  It doesn’t mean that you are overpaying for the new dwelling, either.  It just means that current conditions are differentiating between one type of real estate and another.  If that’s your choice, so be it.  You may still have many good reasons for moving, and they will all still apply. 

The same is true for moving to a new part of the country.  Do your research, and figure out what that region commands for various types of property.  Sometimes, the savings in other categories allows you to pay more for the home, since you will be making it up in ancillary costs.  Or, you may decide to pay a premium for something not easily available. 

Try to remember that it is acceptable to factor in your desires.  Where you live should not, unless it has to be, about where you can get the best deal.  It’s about where you want to be.  Figure out what a particular home is worth to you, and stay at or below that amount.  You won’t be sorry.

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Pearce Real Estate is a full-service real estate company for Greater New Haven and Middlesex counties.  Check out the many real estate buying services that we provide, both in-house, as well as through our partners and affiliates.

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