The decision to purchase a home is a significant financial commitment, but in the current housing market, it may be wiser to buy now rather than wait. As the housing market improves, home prices are expected to rise, making early entry into homeownership a strategic move. Additionally, potential buyers should carefully consider the costs beyond the down payment and closing expenses to ensure they are financially prepared for the long-term responsibilities of owning a home.

The housing market is showing signs of recovery, with pending home sales increasing for four consecutive months as of November 2024, according to the Wall Street Journal. This upward trend, particularly strong in the South, signals a growing demand for homes. Furthermore, the Atlanta Journal-Constitution predicts that home sales across the country will rebound in 2025 after two sluggish years.

With Lawrence Yun, chief economist for the National Association of Realtors, forecasting a 2% rise in median home prices in both 2025 and 2026, waiting to buy could mean facing higher costs down the road. Locking in a home purchase now allows buyers to secure today’s prices and build equity as property values increase.

While saving for a down payment and planning for closing costs are critical steps, prospective homeowners must also account for ongoing expenses that can add significantly to their monthly budgets. These costs include homeowner’s insurance, maintenance, property taxes, and utilities, all of which have been rising steadily.

Homeowner’s (or hazard) insurance is an essential expense that varies widely depending on the home’s location and value. Financial adviser Eric Tyson recommends obtaining quotes for properties of interest before committing to a purchase to avoid surprises. Buyers can estimate insurance costs at approximately 0.5% of the home’s value annually, though rates can be much higher in areas prone to natural disasters

Keeping the house in shape is another ongoing expense that homeowners must budget for. According to a 2023 report by Zillow and Thumbtack, average monthly maintenance costs amount to $500. This includes services like appliance repairs, carpet cleaning, and lawn care. Larger, unexpected repairs, such as replacing a roof or water heater, can cost thousands of dollars. Experts recommend setting aside 1% of the home’s value annually to cover these expenses, updating the amount yearly to reflect changes in home value and inflation.

While we like to think we own a house after closing, we really don’t.  There’s the mortgage to pay and even then, there’s the continuing payment to city, county, and state governments.  

Property taxes are another significant cost that varies by location. Typically amounting to around 1% of the home’s value annually, these taxes can rise as property values appreciate. In Georgia, houses are taxed at 40% of their assessed value, a value set by the local tax assessors office, to which they apply the millage.  This is the tax rate that when multiplied against the assessed value of taxable property calculates the amount of property tax to be paid. 

Then there’s utilities, including electricity, natural gas, and water.  Prospective buyers can estimate these costs more accurately by asking the seller or neighbors about their utility bills. Other potential expenses, such as increased commuting costs or higher auto insurance rates in a new location, should also be considered.

By purchasing a home now, buyers can avoid the financial strain of escalating home prices and rising interest rates. Current mortgage rates are around 6% due to high public debt, these rates are expected to remain stable for the foreseeable future. Waiting to buy could result in paying more for the same property as prices continue to climb, while also losing the opportunity to build equity sooner.

Valdosta offers a great opportunity to do just that.

The Valdosta area offers a wide range of options.  In the $150,000 to $450,000 price range, for example, there are 369 houses listed and of that number, 142 are pending, leaving 227 available.  Within that number, 164 are within the $225,000 to $375,000 price range.  There’s more above and below, of course, but it shows that Valdosta has a healthy inventory which helps maintain the balance between buyers and sellers.

Whether buying or selling, this year is a good year!

Gary Wisenbaker (gary@realtyadvisorsga.com) is a REALTOR® at Century 21 Realty Advisors and can be reached at (912)713-2553 and gary50155@gmail.com