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2019-08-08 09:40:25
Create Wealth: Move Up Now!!

Create Wealth: Move Up Now!!



Many experts are currently discussing a variety of topics such as real estate as an investment, the movement on mortgage interest rates and reasons to buy now instead of waiting. It is important that we realize that this does not apply solely to the first time home buyer.

The opportunity that exists in real estate today is there for everyone.

However, the family that already owns a home might be thinking that, if they wait, their home could be worth more next year than it is now. And that may cause them to delay moving up to the home of their dreams thinking it makes good financial sense. Actually, the opposite is true. This is the best chance a family has to buy up into the home that makes sense for their family right now.

We must realize that whatever percentage of value we gain on our house will also be gained on our dream home.

Millennials: Diversify with Housing



Justin DeCesare is back as our guest blogger today. Justin is the CEO of Middleton & Associates Real Estate, one of the largest independently owned Brokerages in coastal San Diego. 

 

A recent article written by Kelley Holland of CNBC titled “Retirement trumps home ownership for millennials” references a National Endowment for Financial Education study that claims only 13% of Millennials see home ownership as a top priority.

Half of the same sample claimed retirement saving was their primary goal.

To me, as both a Millennial and a Real Estate Broker/CEO, the answers to this survey stem from the perception of what home ownership is.

The last decade, or the fail decade as it is known by MSNBC’s Chris Hayes, has wiped out countless sums of home equity. Even in the gains of the last two years, we are not back at the record highs of 2005 and 2006.

The correlation here is that this decline in home prices is when Millennials have come of age. We have grown up in a time when people began treating home ownership like they would a swing trade. It became the same as renting, but with the possibility for a quick return. Pride of ownership left the picture and Real Estate was turned into another get rich quick scheme.

The free-market economics of the Real Estate Market took over when the bubble was too full, and for most of the average Millennials adult life they have heard nothing but Real Estate negativity in the media.

As the market rebounds, and the understanding that home ownership provides for long term wealth takes over the perception of how retirement savings can be made, I am sure future results of this study will change.

1994 was 20 years ago.

Go back in the public records (or your MLS if it reaches two decades ago) and find some homes that were sold and have remained with one owner since. Even considering the plummeting values of the late 2000s, the home values and retirement savings are still there.

As Agents and Brokers, it is our duty to help our clients and not simply act as a salesman.

My suggestion to you is that as you are breaking down the monthly payments of your young clients’ mortgage, help them see how the home itself is more than a dwelling and how it will play into the diversity of their retirement plans.

Let’s assume your current home is worth $500,000. Your house will be worth $520,000 next year if prices rise by 4% over that time (a number projected by the Home Price Expectation Survey).

However, the $750,000 home you are hoping to move into will also appreciate by about that same 4%. That means next year it will be valued at $780,000. You wouldn’t make $20,000 by waiting. You would actually be losing $10,000 ($30,000 - $20,000).

And, you will pay a lower interest rate on the mortgage than you probably will next year.

Plug in the numbers that apply to your house and the home you are longing to buy and see what the bottom line turns out to be for you.

That is how wealth is built in this country - by purchasing real estate at the right time, at the right price and at the right terms.

Go out and find your family's dream house and buy it! Ten years from now, you will be glad you did!

 
Blog Archive
2019-08-08 09:54:58
Getting a Mortgage: Why SO MUCH Paperwork?

2019-08-08 09:40:25
Create Wealth: Move Up Now!!

2019-08-08 09:39:42
41% of Americans Would Prefer to Build Their Home

2019-08-08 09:36:32
Harvard: 5 Financial Reasons to Buy a Home by Tarik Hall

2019-08-08 09:35:27
FSBO Millionaires Use Real Estate Agents by Tarik Hall

2019-08-08 09:34:09
Difference Between a ‘White Lie’ and Lying by Tarik Hall

2019-08-08 09:32:36
5 Reasons to Hire a Real Estate Professional by Tarik Hall

2019-08-08 09:30:43
Homeownership’s Impact on Net Worth by Tarik Hall

2019-08-08 09:29:32
Gallup Poll: Real Estate Best Long Term Investment by Tarik Hall

2019-08-08 09:28:42
Either Way, You’re Still Paying a Mortgage by Tarik Hall

2019-08-08 09:25:58
Want to Sell Your House? Price it Right! by Tarik Hall

2019-08-08 09:25:19
Freddie Mac: Doubtful Rates Will Return to Recent Lows by Tarik Hall

2019-08-08 09:23:44
Harvard: 5 Financial Reasons to Buy a Home by Tarik Hall

2019-08-08 09:22:38
Millennials: Optimistic & Ready to Buy by Tarik Hall

2019-08-08 09:21:52
Who Says Millennials Are Not Buying Houses? by Tarik Hall

2019-08-08 09:20:13
Hispanic Millennials & Housing by Tarik Hall

2019-08-02 13:01:46
The Feeling You Get from Owning Your Home by Tarik Hall

2019-08-02 12:58:55
4 REAL Reasons Why We Buy A Home!

2019-08-02 12:57:33
3 Powerful Reasons to Buy a Home Now

2019-08-02 12:56:26
Mid-Year Housing Market Update: Three Things to Know Today by Tarik Hall

2019-08-02 12:55:32
What Experts are Saying About the Current Housing Market by Tarik Hall

2019-08-02 12:54:21
Is Renting Right for Me?

2019-08-02 12:52:36
The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC] by Tarik Hall

2019-08-02 12:51:13
The Surprising Profile of the Real Estate Investor by Tarik Hall

2019-08-02 12:50:05
What a Difference a Year Makes for Sellers

Click here to see ALL articles.


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