I guess since I am a Realtor and began this blog for real estate, I should write something about real estate now and then so let’s dive in!
A recent study shows that 93% of Americans would rather invest in a house than in stocks. With the volatility of the stock market, it's easy to see why people feel safer buying a house. Buying a home gives you a sense of security and stability, offers great tax benefits and locks in your housing costs. Owning a home helps grow your wealth through a long term investment, every penny you spend on your mortgage grows over time. The difference with the stock market is that your money may grow, but it has the same chance of sitting idle or burning away. Even though the housing market has seen momentary bumps, it has always been on an upward climb. Investing in a home, is investing in yourself and your future.
There are really only two options when it comes to housing; owning or renting. Renting is a great idea when you are not ready to commit long term to a permanent location. The other benefit to renting is that it usually comes with much less maintenance than owning a home. The general downside of renting is that your hard earned money is being used to pay someone else’s mortgage. When you purchase a home, every mortgage payment brings you closer to owning the property, and also acts like a long term savings account. Rarely does a home lose value without the owner causing such issue, i.e foreclosure or ignoring general maintenance.
The challenge many renters face is thinking that they cannot afford to own and continue the vicious renting cycle. Even with the trajectory of rising home prices, most mortgage payments are still less expensive than the cost of renting. Also, with the rising cost of home prices comes the rising cost of rent. The average rent around Chicagoland is between $1100 and $2000, and that gets you anything from a studio apartment to a 3 bed home. The truth is that for most people, the dream of owning a home is closer to reality than they think. When asking renters why they aren’t purchasing a home, the final answer they give is not having enough money for a down payment. Again, this should not be what holds you back! There are several down payment assistance programs and grants available to get you moving.
The real estate market is a roller coaster, sometimes up and sometimes down, but it always comes back around. You may hear that we are in a “sellers market” since the available inventory is low and prices are high, but this is only half true. 99% of people selling a home are doing so to buy another. While they may be able to sell their home for a high price, and some are getting more than asking, they also have to turn around and become a buyer. The difficulty in a sellers market lies with first-time home buyers who do not have the collateral of a home to sell before making their purchase. To combat this problem, it is best to have an educated agent to guide you through the process of making a competitive offer on your dream home. A good agent may not always give you the answers you want, but that isn’t their job. An agent’s job is to be truthful and act in your best interest, removing the emotional attachment to a property and giving you the best advice and guidance.
