Let’s face it, today’s real estate market has issues, rates are high and supply is near zero.  Potential buyers often hesitate, pondering the perfect moment to make their move. However, several indicators suggest that now is the right time to invest. Here are three compelling reasons why you should consider buying real estate today:

1. Prices Tend to Go Up Over Time

Let's start with the absolute basics.  Real estate is a valuable asset that historically appreciates over time. Property values tend to rise due to factors like economic growth, development, and increasing demand. By investing in real estate now, you're likely to benefit from gradual price increases, which can lead to substantial capital gains in the long term. The earlier you enter the market, the better positioned you are to take advantage of this upward trajectory.

Further not all markets are equal – let’s check two markets: Phoenix (in red) vs Indy (in purple) vs the national average (in green). 

As you can see – market growth varies wildly, and in a market like Indy – property price increases track inflation.  In most of these markets, you are able to buy a home that brings in solid cash flow every month.  In order markets, prices can wildly go up based on many different factors.  One factor we look at very closely is the average rent of a property vs its cost.  If a property has high rental potential, it’s usually significantly less likely to be affected by market dynamics. 

2. Homes Move Quickly: The Best Homes Sell Within Days

The real estate market is often fast-moving, with the most desirable properties selling shortly after listing. This rapid turnover is especially true in popular areas where demand outstrips supply. If you find a property that meets your needs and preferences, it's crucial to act swiftly. Delaying your decision can mean missing out on the perfect home, as the best listings are snapped up almost as soon as they hit the market.

For example in Indianapolis, over 60% of homes are off-market within a 2 week period. Further, this rate tends to rapidly increase in the summer and tails off throughout the real.

3. Interest Rates Are Coming Down: Buy Now Before Things Get Crazy

Interest rates have a significant impact on your ability to purchase real estate. Lower rates mean lower monthly mortgage payments, making it an ideal time to buy. Currently, interest rates are on a downward trend, providing a unique opportunity for potential homeowners to secure financing at a more affordable cost. However, economic conditions are always subject to change, and waiting too long could result in missing out on these lower rates. 

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Consideration: Low Cash on Cash (CoC) return

While there are compelling reasons to buy real estate now, it's important to note a significant downside: currently low cash on cash (CoC). CoC, which measures the return on an investment property relative to its purchase price, is currently lower than usual in many markets. This is driven by high interest rates.  One way to help increase your CoC is to work with a partner like HomeRoom to get higher returns from the same house.   Learn more here.

Conclusion

Buying real estate is a significant decision, but current market conditions offer several unique advantages. From the potential for price appreciation to the urgency required in a fast-paced market, and the benefit of lower interest rates, now is an excellent time to consider investing in real estate investment. Don’t wait for the market to surge again; seize the opportunity to invest in your future today.

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