Being patient in this market

As the new year starts, the market is going through an uptick. Should I worry, should I jump in? All this crosses my mind right now, as it does plenty of other buyers, I’m sure.

Certainly, a lot of listings have gone pending in January that just weren’t selling late last year. It’s almost like everyone woke up in the new year and decided the downturn was over.

I mean, I get it, some people need to buy and perhaps they just decided, fuck it, I’ll jump in 2023.

But I’m still being patient, so here’s how I’m handling the uptick in the market.

Basically, I try not to react on a daily basis to the latest news and stats.

I see people swinging wildly on a daily basis from “I’m waiting” to “I’m buying” to “Fuckit, I’m doomed I give up” back to “I put in an offer!”. It’s head spinning!

I also came up with my own strategy for my situation and wrote it down.

So when I feel FOMO, I look at it and decide if anything has meaningfully changed. I tried to base it on data not vibes.

My Strategy

I’m going to wait until San Diego has decent inventory for san diego – that’s about 3-4 months of supply, or about 5-6k listings.

But I’m only going to wait if the market is staying cold compared to last year, and the Fed is holding rates high.

If they drop by a lot – then yep, I will jump back in because it’s only a matter of time before everything heats up.

I may also pivot if my need for a house changes – that’s personal.

Basing on data

Okay, and here’s how I’m trying to ground this strategy in observable data.

“I’m going to wait until San Diego has decent inventory for san diego – that’s about 3-4 months of supply, or about 5-6k listings.”

• Data: San Diego County currently 2.5 months of supply or 3285 listings.
• Daily panic reason? Oh no, it dropped in Jan!
• Big picture: Still 45% better than one year ago, no reason to panic yet.

But I’m only going to wait if the market is staying cold and not heating up to a similar degree as last year.

• Data: I could use a pending:active ratio but I just look at Altos “Market Action” which is some version of the same thing. Currently 53ish, one year ago 85ish.
• Daily panic reason? Oh no, it was 51 two weeks ago!
• Big picture: Much better than one year ago, when it was 85ish, or 2 years ago, 65ish.

I’m only going to wait if the Fed is holding rates high. If they drop – then yep, I will jump back in because it’s only a matter of time before everything heats up.

Data: This one is easy, just watch what they’re doing and what they’re saying.

Last thing they said I think… they’re going to go to 5.1% before pausing and holding rates high for rest of 2023.

Will they stick to that and not change their mind over the next year? Honestly, nobody knows, so we just have to watch and wait. So far so good, despite many swearing they could not get it up past 4% even.

I may also pivot if my need for a house changes – that’s personal.

Is this an easy out? Haha, yes it can be. Because why not, the strategy is just to guide me.

Life changes, needs change, I need to give myself space to reconsider. Finances aren’t the only factor in buying a home.

So today, has my need changed?

• I still like my apartment, it’s big enough for us and frankly, beautiful.
• My rent hasn’t gone up this year, it’s still a couple thousand lower than what I’d be paying for a mortgage.
• I don’t need new school districts or anything in the upcoming year, nothing changed there.
• Am I tiring of waiting? Sure, a little bit, aren’t we all? But thus far, when I revisit the strategy and the data I see things are still trending in the right direction for us, and I don’t see houses popping up that I wish to buy either.

Final words

So that’s how I’m staying patient in this early start to the year.

Could I be wrong? Sure. Every financial decision, even the ones you don’t take, are a risk. But I figure I just have to do what I can with the information I have and the plans I want out of life.

If you want to do something similar? Have a strategy. Write that shit down. Find data that you can check regularly to help you ground it in reality. Revisit when you feel panicky. Be positioned to react should you decide your strategy says you should.

Disclaimer: I’m an idiot first time home buyer. I’ve never taken an econ class in my life. I’m just sharing what I see and learn as it happens. I am 100% certain I will get things wrong, so don’t take any of this as the golden truth.