Real Estate: Magic 8-Ball Style
Lately home-buyers have asked me what I felt the future for real estate would bring to them when they buy their new home. This is not an easy answer because it depends on many factors including the most important factor; location, location, location. Other factors would be real estate market trends, the economy, jobs available to homeowners, and condition of the home.
To make sure I was on the right track I pulled out my old “Magic 8-Ball” from Jr. High School and asked it if the real estate future in San Mateo County was going to continue to be strong and have annual growth. My ol’ trusty friend gave an answer of YES when I turn it over and look at the answer.
I know, relying on ”magic 8-ball” to give you home buying advice is absurd. However, it seems not far off because no one really knows for sure what will happen in the future. Not even a “Magic 8-Ball”!
I don’t know from my 38 years of real estate experience in San Mateo County that historically we will continue to see growth in our real estate market. Sure there will be corrections but over the long-term we will see up growth in home values.
How I see the future for real estate over the next few years:
- Sale Prices will continue to be stable with an upward trend.
- Interest rates will begin to rise
- Loan underwriters will become more familiar and comfortable with banking guidelines the Feds have put into place.
- Distressed homes will drop because home price have increased to allow homeowners to get their heads above water and sell their homes to pay off their mortgages as they had agreed to do.
- Home sales will support a trend up.
What this means is we will see a healthier real estate market that will mirror a normal real estate market we have grown to expect over the years in San Mateo County. Appraiser will be able to place a proper value on homes because of being able to compare homes that have sold, which have the same features as the home they are appraising. Homeowners who have had hardships in their lives will be able to sell their homes and save their credit and face. It has been very tough for them to be under constant pressure of knowing they owe money, which they don’t have, and they can’t liquidate their assets (home) to have a clean slate so they can move forward.
Being a Realtor for the past 38 years I have practiced what I preach… buy real estate. I can tell you I am far better off today owning real estate than I would be without it. My real estate holding not only gives tax shelter, but passive income as well. It just helps make my life just a bit easier. And it can do that for you too.
The real estate market will not continue to go down the path is going today. The real estate market is static not fixed. In other words…this too will pass.
So take advantage of the real estate market you have in front of you today. Don’t over extend yourself and you’ll be fine. Define for yourself a plan for your real estate acquisition and stick to it. Remember buying a home is a process…not an event like the Super Bowl.
You will be glad you bought the real estate in later years. Rule of thumb for homes purchased in San Mateo County is the value of your home will double every 10 years. Some decades we have seen it happen quicker.
One warning for home-buyers and homeowners; homes are for shelter. As an investment in San Mateo County they have been good investments too, however, having a place to live at a fixed cost is the primary purpose. If you don’t believe me, ask your landlord not to raise your rent next year.
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