Are you considering, or even in the process of buying or selling real estate? If so, we want to arm you with the information you need to be an informed consumer during these unique times.
How does COVID-19 impact your life?
Is everyone you love safe and healthy? Is your job secure? What changes for you?
These are questions we are asking all of our clients before we dive into the conversation any further. Remember, don’t try and time the market, instead, make sure that the time is right for you and your personal situation.
Have a long-term mindset
You might have heard the term “time horizon” in the past, which is especially prevalent in times like these. Time horizon refers to the amount of time you plan to stay in the home, and in these circumstances, we are encouraging clients to have a longer-term mindset with their purchase, to safeguard against any potential, foreseeable future downturns in the market.
Today’s mortgage interest rates are at an all-time low since Freddie Mac has begun tracking interest rates in the 1970s. Interest rates play a large factor for both buyers and sellers. For buyers, it helps inform buying power, meaning how much of the monthly payment goes to paying down the principal (the mortgage amount itself, ie how much you owe on your home). For sellers, it equates to how many buyers can afford the house a seller is trying to sell. The lower the interest rate, the more money people can spend on the house itself rather than the interest on the loan to purchase a house.
An investment everybody uses
Real estate is a unique investment in that everybody needs a home to live in, which in this case is the investment itself. You normally can’t live in stocks or bonds, or gold or silver, but everybody needs real estate. Whether you’re paying rent or paying your own mortgage, you’re paying down someone’s mortgage. By paying down your own mortgage, you’re the one capitalizing on the appreciation of the home paired with the monthly payments to pay down the loan. With the cost of rent rising, and the average annual appreciation in Denver over any decade being over 5%, buying is typically the smartest investment strategy. In fact, over 90% of millionaires own real estate as it’s a known path to financial success.
Ultimately, we all have to make choices that are best for each of us and our lives. We encourage our clients to be financially aware and consider a home purchase as part of a larger financial strategy. Real estate is one powerful way you can make strategic financial moves, Corona Virus or not.
Thinking about buying or selling? Contact us for a free consultation!