It is always the people who go against the grain that make real headway economically and for their future. One of my favorite radio personalities is Colin Cowherd on ESPN. He is always talking about buying when others are selling and generally not following conventional wisdom. So true. Think back to the great depression and the lives effected and fortunes gained. If you could buy stock now in retrospect, would you give five cents a share for Coca-Cola stock? Of course you would! If you could talk to your grandparents at 20 years old would you tell them to scrape up whatever money they had and buy some stock? Yes! That one purchase ten years later could have made them a fortune and fifty years later could have changed their family tree forever.
The same situation is happening in real estate. By the time conventional wisdom tells you it is time to buy and a “hot market” it will be too late. By the time you’re all in and ready to buy it could be after all the smart people made the best deals. The problem? We all listen to the news way too much!
All finance like real estate is local. I am not saying you should go out and do something your not capable of or overextend yourself and take unnecessary risks. But I see people, especially first time home buyers, with good jobs and a down payment waiting to see what is going to happen! Not smart. With rates under 4% and prices what they were at seven years ago housing affordability is at an all time high. I also see folks that could get out of there home and purchase the home they really want waiting until their home value goes back up. I am here to tell you that by the time the values go back up, the value of the house you want is going to be that much higher and instead of 4% you are going to be facing 6-7% or higher! That will mean payments of hundreds of dollars higher than what you would be paying right now.
I remember my parents buying a house in the early 90’s. They got 10% on their loan and were very excited about the good rate that they got. That could be you. If you are considering a change, I would urge you to make it before the rest of the country realizes that this economic cycle too shall pass. The economics of this country has waves, don’t be caught trying to buy or sell a home at the peak of a wave at high tide.
Example: $200,000 loan at 4% on 30 years -$955 per mo principle & interest
$200,000 loan at 10% on 30 years -$1,755 per mo principle & interest
FYI if you are happy where you are, have equity, and haven’t refinanced your mortgage yet to down around 4% -go do it!
Craig Soelberg
Sheila Smith Real Estate Group
RE/MAX Capital City
