Economists at Bank of America are warning first-time home buyers to be patient due to low supply and rising prices.
They predict home prices will climb by 4.5% this year and then another 5% in 2025 before eventually dropping by 0.5% in 2026.
“I don’t see 2026 as a turning point of any kind that would make sense for first-time home buyers to wait until then,” said Ryan Kotschedoff, Eighty20 Group realtor.
Kotschedoff says that with a low supply that can't keep up with demand, home prices have nowhere to go but up.
“A market that's relatively stable like this one, I think it's best to purchase property as soon as you can and start building equity,” Kotschedoff said.
Katherine Chen Hudson, a broker at Modern Kathy Inc. in San Luis Obispo also disagrees with the new report from Bank of America which suggests some people may want to wait to buy.
“If you can pay for the mortgage, just do it,” Chen Hudson said.
“It’s best to purchase property as soon as you can,” Kotschedoff added.
In May of 2024, the median listing home price in San Luis Obispo County was $1.1M according to Realtor.com.
“At least at the end of this year and 2025 you can expect interest rates to stay where they are but I think first-time home buyers are going to have a very difficult time affording property over the next two years. In 2026 there might be a slight decrease in home prices but nothing that would outweigh the appreciation you would get over the next two years,” Kotschedoff said.
For first-time home buyers, local real estate agents recommend talking with a local lender first to see what you can get approved for.
