I feel like I was just announcing to you our first home purchase in Tempe! Well, SURPRISE: it’s been a year and we decided to buy another house and make our first home a rental property! Gavin and I have always wanted to own investment properties and figured we should get a head start while we’re young; and especially before we can’t afford to buy in Phoenix anymore!
We’ve now purchased homes in two completely different markets in a matter of a year. When we purchased our first home in Tempe, in April of 2021 – interest rates were in the low 3’s. There wasn’t much inventory and we had to compete with multiple offers, pay well over asking price, waive the Appraisal Contingency, we weren’t allowed to ask for repairs after the inspection period, and we allowed the seller to live in the home for 45 days after closing FOR FREE. When we purchased our new home in Phoenix in May of this year, we only competed with 1 additional offer, offered the asking price, didn’t waive the Appraisal Contingency, AND were able to negotiate repairs. However, we have an interest rate in the high 5’s on our new home.
Here’s the thing, rates feel high right now because we were lucky to have them in the high 2’s and low 3’s for such an extended amount of time.
This obviously allowed buyers to have more “buying power” when looking for homes, but this also came with the price of high competition and seller’s being in charge due to lack of inventory. Whereas what we’re seeing now in the market is lower competition and buyers gaining back more negotiating power with their offers.
There’s never a “perfect” market to buy in, it just has to be what’s right for you and your personal situation. From what we’ve experienced in the past few years, you can either compete in a market with low interest rates but high demand and competition, or in a market with higher rates and lower demand and competition. AND ALWAYS REMEMBER, you can refinance to a lower rate once they come down – I can tell you right now that’s 100% what our plan is.
I’m always happy to discuss our situation and why we chose to purchase not one but TWO homes in markets that some people have been more cautious about.
Do you have real estate questions? I am happy to help! Contact us today at 602-903-7220.