You or Them?
The real estate market is finally taking the much overdue breather it has needed for years now. Interest rates are on the rise and home prices in most markets are softening. The areas in the country that grew the fastest and most in pricing will see the most correcting. The big “R” word has been talked about by economists and the pundits, and that’s recession. Is recession doom and gloom for the real estate market? If history is right, then the answer isn’t necessarily a resounding yes.
The real estate market has been in need of this for awhile. Recession is likened to a pressure cooker, and when the steam is let off to reduce the pressure, it’s a good thing and healthy! The problem for people today is, you’ve got to live somewhere!
If you don’t have family to move in with, then you are faced with the prospect of renting. That highlights the problem that buyers are facing today. Rents are on the rise, and I’ll direct you to the experts like Dr. Lawrence Yun in an interview recently done here: https://finance.yahoo.com/news/housing-homebuyers-rents-144614590.html
So just a highlight of this is that because some buyers have been priced out and with interest rates on the rise; the affordability of the mortgage payment has declined, so they become renters. This causes a shortage in rental properties as more renters are chasing fewer houses because there is simply not enough housing to provide. This is why you see some companies buying up newer homes to turn them into rentals as well as builders trying to build more apartment buildings, but the amount of them simply falls short of the demand. So simply put demand is greater than supply and thus the rents go up!
My philosophy is simple: pay yourself! If you are renting, then you are paying someone else’s mortgage for them and that’s a good thing; for them!
Maybe you are not in a position to buy today, and I get that. But are you willing to put yourself in a position to buy in the next 6 months; 1 year; 2 years? 9 out of 10 millionaires in the US made their money in real estate, and so can you! You will always have the need to live somewhere. The question is, will this be a place you own, or will you be paying on the owner’s behalf?
Start today, and make it a goal giving yourself a reasonable deadline and watch; your dream will come true, and while you can’t time the market top or the market bottom, we are coming into a great season where the next generation of millionaires in America will be made. Be one of them!
Email me anytime with questions at Mike@MikeRains.com
Mike Rains- Remax TerraSol
Huntington Beach, CA
Mike Rains, Realtor
Huntington Beach, Orange County, CA