Real Estate Voted as Better Investment Than Stocks, Gold and Savings for 8th Consecutive Year
Nationally, real estate tops the list as the best long-term investment for the eighth year straight. (Source: Gallup) Real estate continues to gain traction as the best long-term investment in the country, check out the graph below.
If you’re thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, combined with rising mortgage rates, real estate sales prices continue to climb. Homeowner’s are building incredible amounts of equity as home prices appreciate.
Why Is Real Estate a Great Investment During Times of High Inflation?
With inflation reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, explains it like this:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
– James Royal, Senior Wealth Management Reporter at Bankrate (Source)
If you’re a renter, you don’t have that same benefit. You aren’t protected from increases in your housing costs, especially rising rents.
History Shows During Inflationary Periods, Home Prices Rise
As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. And that makes buying a home a great hedge during periods of high inflation.
“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”
– Natalie Campisi, Advisor Staff for Forbes (Source)
In conclusion, housing truly is a strong investment, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.
In today’s housing market, there are far more home buyers looking for homes than home sellers listing their houses. Based on the concept of supply and demand, this means home prices will naturally rise. Why is that? When there are more people trying to buy an item than there are making that item available for sale, that drives prices up. And that’s exactly the case in today’s housing market. So, knowing what’s happening with the inventory of homes for sale and the demand for housing is crucial for today’s buyers and sellers.
Demand Is High and Supply Is Very Low
The latest buyer and seller activity data from the National Association of Realtors (NAR) indicates buyer traffic heavily outweighs seller traffic today, as shown in the maps below. There are far darker blues (strong buyer activity) on the left and much lighter blues (weak seller activity) on the right. In other words, this shows how the demand for homes is significantly greater than what’s available to purchase.
What Does This Mean if You’re a Seller?
Supply is struggling to keep pace with demand. In fact, the inventory of homes for sale recently hit an all-time low. That gives you an incredible advantage when you sell your house. With so few listings, it’s likely more potential buyers will view your house – especially if you work with an agent to price it right. That means there’s a high chance you’ll receive multiple offers or buyers will enter a bidding war for your house. And that dynamic can drive the sale price of your home up.
What Does This Mean if You’re a Buyer?
As a buyer with fewer options available, you’re likely to see more competition, so you need to be strategic to win. First, make sure you have a trusted professional on your side. Your real estate agent will help you understand your local market and work with you to act quickly when the time is right. Even when it’s challenging to find a home, you can still succeed as a buyer today if you have a trusted advisor on your side every step of the way.
In conclusion, whether you’re a homebuyer, seller, or both, knowledge truly is power. Let’s connect today so you can better understand what’s happening in our local market and achieve your home buying and home selling goals this year.
7 Tips for First-Time Home Buyers
Buying real estate for the first time can feel quite intimidating – you’ve got to deal with agents, sellers, rival buyers, banks and lawyers. And it’s not always clear what role each of them plays in the process.
As an experienced local agent, I have worked with many young and first-time buyers. It’s great to guide them on the journey of property ownership and help set them on the path to building their wealth through real estate.
Any first-home buyer should appreciate that they always have access to many professionals who can help explain the various tasks and processes required to buy a home. It’s not like you’ll walk through the experience blindfolded.
To help you on your way, here’s a quick list of tips for the first-time buyer. You’ll find the act of buying property is not as intimidating as you might have feared.
- Start saving: That means not only reducing your day-to-day spending but also working to reduce regular payments on debts for items such as a car or personal loan. These obligations will reduce the amount of money a lender will allow you to borrow.
- Work out a budget: Investigate how much you might be able to borrow. Factor in the expenses of buying a home, such as legal costs and moving. You should then have an idea of what you can afford. Setting your expectations early on will focus your home-hunting efforts and avoid disappointment.
- Arrange financing: Spend time exploring your options. Some banks demand a 20% deposit; others are more flexible. Perhaps your parents will go guarantor for the loan, or part of it. Consider using a mortgage broker as they will guide you and recommend suitable loan options.
- Pre-approval is the first-step: Getting a letter of pre-approval from a lender is the first-step in the home-buying process so you know what you can afford. A lender won’t give you a pile of cash based on your salary. They’ll grant “pre-approval”, which means you can make a monetary commitment with confidence. However, the lender will finalize its approval once they’ve valued and approved the property you intend to buy.
- Get mentally prepared – With your finances lined up, you need to think about the dynamics of buying a home. If you find your dream place, you better believe others will love it, too. So, be prepared to move quickly to beat the competition.
- Find a great agent – For a first-time buyer, a great agent will make the experience smoother and less stressful. When selecting an agent, ask each one to share with you properties they’ve bought for other clients. This will indicate whether they can find what you’re seeking.
- Go hunting – House hunting is fun but exhausting. In a hot market, it can get stressful because of buyer competition. Don’t be put off, and keep your focus. You may miss out on a few properties, but there are more out there.