How is the Real Estate market, today?
Hello,
As a Realtor, I am always faced with this question: “So, how is the Real Estate Market today?”
My answer to this question is:
“Great…Great…Great.” Depending on what your financial goals are for future.
For Buyers:
No matter when you buy a home it is always a great market. When you buy in sellers’ market, you typically tend to enjoy lower interest rates on your mortgage. When you buy in buyers’ market you typically have negotiating power with sellers and sellers tend to better present their homes in the form of remodeling, upgrading or better amenities to attract the buyers.
For Sellers:
If you are selling your current home to buy a bigger home, then this is a good time to buy. Statistically, people buy their 2nd home 50% more expensive than their current home.
That means, for example, if the market has gone down by 10%, you will end up selling your current home 10% lower than originally intended price. But you are also buying your newer bigger home at 10% below market price.
Let’s take an example:
Current home price
$250,000
25,000 (market down by 10% .. your loss)
________
$ 225,000 sell price of your current home
New home Price
$ 450,000
50,000 (market down by 10% ..your profit)
_______
$ 400,000 sell price of your current home
$50,000 – $25,000 = $25,000 of profit
Reverse trend will happen in a good market meaning you sell at 10% profit but you are also buying at a 10% loss which will result in your net loss.
The reason is simple. Real Estate is one of the best LONG TERM INVESTMENTS anyone can ever make in their life. Historically, Real Estate Market on average has always moved up.
The fact is that everyone needs to have a roof over their head whether you live in your own home or you live in someone else’s (rental property).
So the question is:
Do you want to make yourself rich by owning your home and building equity over years and enjoying lowered taxes or do you want to make someone else rich by handing them your hard earned money (i.e. rent) and also giving away your hard earned money to Uncle Sam in the form of higher taxes?
Of course you know the answer to that.
Going back to the question:
1. We have lot of housing inventory right now that means it is a Buyers’ market and sellers are more desperate and may be willing to negotiate or more readily work with your terms.
2. Generally the prices of homes have comparatively come down with few exceptions like in good school areas.
3. Even though the interest rate is fluctuating currently, current interest rates are actually still pretty good. You never know which way the market will go in future. If you buy now you can always refinance if the rates go down even further.
4. With election year coming up next year, the new candidate may try and improve market conditions for buyers which means there may be more buyers increasing the housing demand…which in turn may drive home prices up (multiple offers means more money out of buyers pocket).
5. Historically, end of every decade home prices have gone up…that means that if you may get good rate of return for your investment in just few years.
6. Real Estate business is a cyclical thing which means after a downturn there is always an upturn (the number of years may vary).
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