Sharing an analogy that shows the truth in today’s confusing market.
A lot of people are frozen in today’s market, and I can’t blame them. There is a lot of conflicting information about interest rates and home prices, so everyone is afraid of making a mistake. While this is understandable, there is one key thing that will make a difference: knowledge. When a person has correct information, they can be confident in their decisions.
One great way to understand today’s market is the quarter-dollar analogy. Let’s say that you have a quarter and I say I want to trade you for a dollar. You’d know that was a great deal! The same is true in today’s real estate market.
“Real estate appreciation is straightforward.”
In our area, if you bought a three-bedroom, two-bathroom home in 2013, you would’ve paid about $140,000. Today, you could sell that kind of house for at least $240,000—that’s a huge jump! In 10 years, you earned $100,000.
Then think about the people who were renting during those 10 years. They haven’t gained any equity, and their rental rates have just gone up! In comparison, the people who purchased a home in 2013 have experienced their payments going down because of interest rates going down from 7% in 2013 to the 3% it was a few years ago. Therefore, homeowners who refinanced are paying less and earning much more. That’s a great trade, as straightforward as trading a quarter for a dollar.
This information should help you make an informed decision in today’s real estate market. If you have any questions, don’t hesitate to reach out. You can call or email me anytime and I would be happy to help you.
