Last Call For The Biggest Equity Gains

Houston, We Have A Situation

Our economy was on a big roll in 2019 and along came this little thing called coronavirus. Nobody saw coming and I don’t have to tell you what happened next. We were all there.

And locking down for an extended period of time is never good for an economy based on traveling, seeing concerts, eating out and just generally engaging as a society.

To prop up our economy, Congress passed financially supportive legislation and our Federal Reserve took its own actions, including lowering interest rates dramatically. 

At the same time, home was suddenly really important to all of us. It was everything and people started thinking about buying a home or changing the home they already owned. With extra money in the bank after a year of staying home and historically low interest rates, buying a home was suddenly on everybody’s mind.

And because I’m writing this post for an audience of real estate buyers, I don't have to tell you what happened next. Bidding wars!

Tons of buyers and not enough sellers. Supply and demand was front and center. With bidding wars, came huge spikes in prices. High priced sales meant surrounding home values rose and those owners saw huge boosts in equity.

But all of this is extremely situational and related to our once in a hundred years pandemic. As we start to emerge from our coronavirus cocoons, and the economy starts getting back to normal, interest rates will rise. They have to rise. We can’t artificially support our economy forever and we wouldn’t even want to. We want a vibrant economy and with that comes higher interest rates.

Have You Seen The Actual Equity Numbers??

The western states are off the charts with their equity gains. The number shown for California on the map represents an average across the entire state. Los Angeles’ beach cities are way higher. Manhattan Beach, for example, has seen its median price bump $50K per month for the past six months!

Text TRENDLINE to 424.228.9969 to find out what prices have done in any California city in the last year.

All of this is to say that owning a home in Silicon Beach has been very profitable recently.

Where Are We Headed?

Prices are forecast to keep rising as long as there are lots of buyers (supply and demand again!). And it is likewise forecast that there will be lots of buyers until interest rates get too expensive.

With no crash coming, any equity you build now is not going to evaporate.

What Does This Mean For Buyers Right Now?

Buyers right now have a definite advantage with interest rates at historically low levels. Locking in at sub-3% for 30 years is very attractive.

But this isn’t expected to last. In fact, the opportunity might be more short-lived than we think. Early talk was that we might see low interest rates for several more years, but recent chatter about surging inflation threatens to change the conversation. Higher interest rates temper inflation, and the Fed might be forced to reverse course on low rates.

But even as rates increase, it will likely be slow-ish. Smart money says prices will keep going up for the next five years, but at a slower and slower rate. Balance that against rising interest rates. Survey says ... for maximum gains, you should be buying now. 

As in right now.

Should You Sit Tight If You Already Own?

If you already own a home but want to buy another, should you wait so you have the extra equity to pay for your next home?

It depends.

Are you downsizing? If yes, it might make sense to wait BUT you have to run the numbers and consider the higher interest rates that you’ll be confronted with when you buy later.

Are you upsizing? By all means, buy now before prices go up and bag the biggest equity gain for yourself.

Want To Talk Out All The Angles?

We’re here to hash out all the angles with you! You know about our drop in office hours, right? Office hours are a casual way to just pop in and ask questions without any obligation. We are there on zoom, dropping knowledge to anybody who wants it. Get the access instructions here.

You can also schedule a 1:1 meeting by picking a time on our calendar that works for you. Find access to our calendar here. 

So who is ready to shop?? 🙋‍♀️🙋‍♂️ If not you, what are you waiting for? Really, tell us and let us help you get ready.