Counterintuitive Wisdom

In major life decisions following the herd is often seen as the safe route. Yet history is rife with stories of those who dared to zag when everyone else zigged, reaping substantial rewards.  

Think of Warren Buffett, whose counterintuitive wisdom made him one of the wealthiest men alive. He once advised, “Be fearful when others are greedy, and greedy when others are fearful.” Similarly, hockey legend Wayne Gretzky famously skated to where the puck was going, not where it was. This approach of anticipating future positions rather than reacting to current situations can be applied to today’s unusual housing market conditions. 

I’ve been in real estate my entire adult life and I believe the current homebuying climate may represent the best opportunity of the century to act on counterintuitive wisdom. 

The Sidelined Homebuyer 

Recent months have seen an unexpected rise in home loan rates—from about 6% to over 7%—right after the Federal Reserve slashed the Fed Funds Rate by 0.5%. This has left potential homebuyers and industry experts alike baffled and cautious, causing a significant number of buyers to postpone their purchasing plans. Coupled with rising home prices and a limited number of homes on the market, there has been a resultant build-up of homebuyers sitting on the sidelines, waiting for the “right time” to jump back into the market. 

The Election Effect: Decision Paralysis 

Adding to this homebuyer hesitation has been the decision paralysis we often see before national elections. Many potential buyers are waiting to see the results of the election before deciding whether to begin looking at homes. However, history shows that the results of big elections rarely have any short to mid-term effect on the housing market. Politicians know people want to own homes, so whether Republican or Democrat, they are hesitant to act contrary to the American dream of homeownership.   

A Surge in Home Inventory 

In the past ten weeks, Phoenix home inventory has surged by 21%, with a total increase of over 40% since the beginning of the year. Most cities across the country have experienced similar increases in home inventory. This rapid expansion of homes for sale presents a unique opportunity for buyers. Sellers, facing fewer showings, welcome buyer interest and often express willingness to negotiate. Over 40 years of selling homes today’s sellers are among the more reasonable I’ve seen.

Best Buying Opportunity in a Century 

The convergence of rising rates, an increase in housing inventory, and election-induced hesitancy has created what could be the most advantageous buyers’ market this century. The homebuying benefits are clear: A greater selection with less competition results in better prices and more favorable terms. 

Counterintuitive Wisdom

As Buffett and Gretzky have shown, success often comes from acting the opposite of the masses. Business magnate Carlos Slim expressed it well: “When people are fleeing, buy. When people are buying, sell.” Applying this to today’s housing market, the contrarian approach would be to buy now—when most are waiting for more stability and lower rates. 

Act Now, Refinance Later 

Experts predict that current interest rates are likely to fall into the mid-5% range by late 2025. This presents a unique opportunity to capitalize on a market where buyers have more leverage, then refinance at a lower rate next year, likely saving more in purchase price than the incremental extra cost of the loan.  

The Smartest Decisions 

This moment in the housing market is unique, an opportunity for buyers who are willing to think and act counterintuitively. With an abundance of properties to choose from and a willingness of sellers to negotiate, conditions are more skewed in favor of buyers than they have been in years. This is a rare and fleeting situation buyers would be wise to take advantage of.

The best opportunities often come from unexpected conditions. The best time to move forward is often when the rest of the world is standing still. The smartest decisions often come from counterintuitive wisdom.