Why Waiting for the Market to Change is a Losing Strategy
It’s been more than two years since the Federal Reserve started raising interest rates to slow down inflation. And while they haven’t raised rates any further since July 2023, inflation has slowed down, but housing prices haven’t. In fact, in many areas—including right here in Kansas City—home prices are holding steady and in some cases, still climbing.
If you’re waiting for the market to “correct” before jumping in, you're not alone. Many investors are sitting on the sidelines, hoping for a better deal. But the truth is, waiting might not be the best strategy, especially in a market like ours. So, what are you waiting for?
Supply: There’s Just Not Enough to Go Around
The simple fact is, the supply of homes just can’t keep up with demand. After the housing collapse in 2008, new construction came to a screeching halt. And while there’s been some progress in recent years, it’s still not enough. Builders are working hard to catch up, but there’s a lot of red tape, zoning issues, and material shortages to navigate. The result? Homes are in short supply, and prices are staying high.
So, are you really going to wait around for more houses to be built? If so, you’ll be waiting a long time. And by the time new homes hit the market, demand will likely be even higher, which means prices will keep climbing.
Demand: The Market Isn't Shifting As Expected
Now, let’s talk about demand. Many investors are waiting for prices to dip or for interest rates to fall before jumping into the market. But here’s the thing: the market has actually been pretty steady for over a year now. While there are definitely more homes being built than in recent years, it’s still going to take time to close that gap.
Here’s the tricky part: even if interest rates or prices do come down slightly, there’s a huge number of buyers out there just waiting for that to happen. These buyers have been holding off, waiting for what they think will be a better time to buy. But when interest rates finally drop, or prices dip just a little, the floodgates will open. Suddenly, you’re going to be competing with way more buyers. So, what happens to prices when demand spikes? That’s right—they go up.
The Reality of Waiting: More Competition, Higher Prices
Here’s the key point you need to remember: as long as supply is low, prices are going to remain high. And once that supply starts to catch up (which, as we mentioned, could take a while), you’ll be dealing with an influx of buyers who have been sitting on the sidelines, just like you. When that happens, sellers will have more choices, which means they’ll have the upper hand—and prices could shoot back up again.
So, while you might be able to find a deal once interest rates or prices start to come down, your competition will be through the roof. In other words, you might get the price you want, but you could end up losing out on the property you really want because there are so many other buyers fighting for the same deal.
Why Buying Now Might Be Your Best Bet
The smart move is to get in now while competition is still relatively low. Sure, the market might feel competitive, but it’s nothing compared to the stampede of buyers that will come when rates or prices drop just a little.
In Kansas City, you’ve got an opportunity to buy with fewer buyers in the mix, which gives you a better shot at securing a property before everyone else rushes in. Waiting for the market to change could mean missing your chance at a home you actually want, and you might have to deal with a lot more competition when you finally decide to act.
Bottom Line: The Time to Buy Is Now
If you’re waiting for the market to turn, you could end up waiting longer than you think. The best time to buy an investment property is right now—before more buyers flood the market and prices climb even higher. Sure, you might not get the absolute lowest price, but you’ll have a better chance of landing a great property with less competition.
So, get off the sidelines and make your move. The market’s waiting for you—and the longer you wait, the harder it’ll be to get in on the action. Let your property manager help you find your next great rental property. Schedule your introductory call here: https://calendly.com/eddie-kcvppm