“It looks like $430,000 gets us about an 1800 sq foot home.
It is a hard pill to swallow as our first home we bought 22 years ago was 2100 sq feet for $116,000.
I’m sure this is common to hear, but wish we’d had a crystal ball. We sold 3 homes one after the other because of health challenges right before the housing boom took off and then interest rates rose”
Many current and past homebuyers are feeling this one. But while dwelling on the past can be tempting, this perspective doesn’t offer a way forward. It just keeps you stuck reminiscing about how things used to be, and what you could have done differently.
There’s no going back.
If you purchased a home during 2011 to 2019, you need to realize that you were VERY LUCKY (or wise) to be able to take advantage of low home prices and interest rates in the past. The way things are looking, a good percentage of younger generations won’t even get to experience homeownership. They may not even see a benefit in it at this point, because it is so far out of range.
You and I know better. Owning a home opens the door to much more opportunity than renting ever will. We’ve seen it, and we’ve seen what it can do. So why do you doubt it?
Here are some things pushing home prices up, and I don’t see any of them as being temporary in nature.
1. People are not only NOT moving out of Utah much, but they’re moving TO Utah from more expensive states, because remote work now allows them to. We have a beautiful state, with low crime and a high qualify of life. Our population has increased significantly, and with it, the demand for housing.
2. The cheap credit we had during the pandemic allowed a lot of people to use large amounts of money to buy assets such as real estate. They are still holding these assets, because they’re in low interest rate loans. And I’m not talking just about people with money. I’m referring to the average homeowner that borrowed against their home equity, and purchased a new primary residence with the “free money” they gained in appreciation. Now they’re renting out their old home, and making a nice profit each time rents go up, but their low 30 year fixed payment doesn’t.
3. Real estate investment trusts (REITs) are purchasing homes in the first time homebuyer range (often outbidding normal people) and renting them out for a profit. In states like AZ they purchased entire neighborhoods, and are able to control rent prices because of it. Your “dream home” that you’re fantasizing about buying one day is an asset in an investment portfolio. And it’s never going back on the market.
Time is not on the side of those who wait.
If you’re waiting for the perfect moment, or for a market crash, realize that there are too many people in qualified low rate mortgages that have no incentive to sell. There is no wave of defaults coming.
There is just less and less inventory as more and more people (and companies) buy real estate and hold those assets as their cash cows.
A wise man once said:
“Incredible change happens in your life when you decide to take control of what you do have power over instead of craving control over what you don’t.”
― Steve Maraboli, Life, the Truth, and Being Free
Not sure where to start? Start by writing me an email. Tell me where you’re at, and where you want to get. Let’s find you a way to own a home in 2024. [email protected]
