This morning when I went next door to get my daily fix of caffeine the server at the coffee bar asked me how business was. When I told her it was good, she replied “well of course it should be, right ? With interest rates the way they are, and prices where they are.” ….. ‘Out of the mouths of babes’ – I mean coffee bar servers. Anyway, that verbal exchange inspired this latest blog from me.
The point is, as many of you know, I send this message out repeatedly: whether you are an investor or a first time home buyer, there has never been a better time to buy. And, if I am to put any stock in my little coffee bar incident this morning, apparently everyone knows it. So why isn’t everyone doing it ?
One reason I hear from some of you is that you have experienced the frustration of bidding wars (or know of friends who have) and have not come out on top.
I have seen a number of these and know that can be true. But here is another prospective: why not actually win the bidding war ?! (something I have done for many clients).
Look…. if you are bidding on a property that is on the market, say, for $475,000 and a bidding war is driving that price up to $500,000, but that same property sold (or would have sold) in 2007 for, say, $750,000, isn’t that still a good deal ?
“Yes,” you say, “But wasn’t that just an artificially inflated price based on crazy machinations going on in the economy at that time ?” Well, yes, maybe it was. However, most economists (and more importantly, most smart successful investors) will tell you that, even though that is true, one can anticipate that sometime in the not-too-distant future, based on the long-time universal pattern of Real Estate values, that price is going to go right back up to that price point. If you are a first time home buyer, that is great news for you, because when you go to sell your home years up the road, you can expect to make some good profit that can either: a) help you get a bigger, nicer home in a better location b) have some extra cash for your children’s college education c) have a very good jump on your retirement or d) all the above !
If you are an investor, not only can you expect to accrue some good equity with which to buy more investment properties, on top of that you have another phenomenon in play right now which is greatly working to your advantage; that is, due to economic factors currently in play, many many more people are becoming renters right now. The rental market is increasing and will continue to do so increase for some time to come.
OK, that’s all I’ve got to say for today…. and all from buying a cup of coffee, right ?! Have a great day, and if you want help regarding anything Real Estate re- lated, call me or come see me at my office anytime !
Let me know if you want my help on this.