Buy the dip?

Buy the Dip? What Falling Prices (or Rates) Mean for First-Time Investors

real estate
August 21, 2024•3 min read

Buy the Dip? What Falling Prices (or Rates) Mean for First-Time Investors
August 2024

If you've been sitting on the sidelines waiting for the “right time” to buy your first investment property, this might be your moment. As of late summer 2024, home prices are softening in several key markets, and interest rates are showing signs of settling. For first-time investors, this creates a window of opportunity that hasn’t been open in years.

But should you buy the dip? Let’s break down what falling prices—or falling rates—really mean for aspiring investors, and how to position yourself to buy smart and build long-term wealth.

1. Price Drops Mean Negotiation Power Is Back

After a few years of overheated bidding wars, many markets are finally cooling off. Sellers are:

  • Cutting prices to move homes faster

  • Offering concessions (closing cost credits, rate buy-downs)

  • More willing to accept investor offers with financing

Investor Tip: This is your chance to get into the game without overpaying. If you’re buying a rental property, focus on cash flow and location stability, not just short-term appreciation.

2. Interest Rates May Be Peaking—But Not Forever

While rates remain higher than the 2020–2021 lows, they’ve started to stabilize. And many economists predict gradual declines into 2025.

What this means for you:

  • Buy now, refinance later when rates drop

  • Lock in a deal with seller-paid rate buy-downs

  • Use adjustable-rate mortgages (ARMs) strategically for lower entry costs

Waiting for the “perfect rate” could mean missing a property that generates income today.

3. Rental Demand Is Still Strong in Key Areas

Despite shifting home prices, rents are holding steady—or rising—in many markets, especially those with:

  • Growing job opportunities

  • College towns and medical hubs

  • Limited new construction and low rental inventory

If you find a deal that cash flows from day one, you’re already ahead—even if the market fluctuates in the short term.

4. Leverage Is Still Your Superpower

Real estate allows you to buy a high-value asset with a relatively small upfront investment. Even with today’s rates, smart investors are using:

  • Conventional 15–25% down investor loans

  • FHA or VA loans with house-hacking strategies

  • HELOCs from existing properties to fund a second investment

Use other people’s money (and other people’s rent) to build equity over time.

5. Market Dips = Less Competition, More Options

Investor competition has cooled significantly since 2022. Institutional buyers have pulled back, and hesitant first-time buyers are still unsure.

This is your advantage:

  • More time to inspect and negotiate

  • More motivated sellers

  • Better financing terms if you’re prepared

Remember: Wealth is built when you buy, not when you sell. Buying the dip gives you a head start on future appreciation.

Bottom Line

If you're a first-time investor with capital, strategy, and a long-term mindset, August 2024 may be your green light. Whether prices dip further or rates drop later, the opportunity to buy below peak value and generate positive cash flow is already on the table.

The key is preparation. Get pre-approved, analyze deals, and make your move before the next wave of buyers returns.

Because in real estate, fortune often favors the first movers—especially when the market's cooling down.

Back to Blog