It’s the first of the month, and as you’re writing yet another $1400 check to your landlord for rent, you ask yourself….
“I wonder how much I’ve paid in rent so far to this guy.” 🤔
You do some quick math and realize that after 3 years, you’ve spent over $50,000, simply for the pleasure of renting space in a building you don’t own. 😡
“That’s it! I’m buying a home. I’m sick of wasting my money.”
You open your phone and type in, “Homes for sale near me.”
You do a double take at the homes listed around you for $200,000 - $500,000 (not uncommon for Detroit metro).
“Ugggh! Why are homes so expensive?”
I’m glad you asked! Here’s my top 3 reasons on why home prices will continue to rise:
1. It’s not so much that homes are gaining value, as it is your dollar is buying less. 🫤
The video in my email signature explains this comical (yet unfortunately true story) of why home sale prices will continue to increase, so long as there is always a blank check for our government to print more money, it's buying power will be less and less.
2. Currently, real estate inventory is very low.
Confession time . . .
I’ve been looking to move out of Southgate for almost 2 years.
Yet, every home that matches my criteria is out of my budget.
To put this in perspective, I live with my household of 6 in a 1960s colonial, that’s 4 bed 2.5 bath and 2500 sq ft.
To buy my EXACT home in the country somewhere (like Rockwood or Monroe County) on 10 acres…..would cost about $200-300k more than I could sell Southgate for.
Largely because only a couple listings pop up each month.
And anxious buyers pounce on them like those gross fish in a pedicure pool.
Low supply equates to high demand.
Economics 101.
3. Cultural Misinformation/Denial
If I had $1 for every time somebody said they’re going to wait for a real estate crash like in 2008….well....I’d be able to move to buy that home in Monroe County on 10 acres. 😂
Yes, you can expect ups and downs, (like any market) but even during the last crash…..home buyers were competing with BILLION DOLLAR investment funds that are paying cash for desirable homes (I know because I was an investor at the time. It was ruthless)
So where a conventional mortgage would take 30-60 days to close . . .
A cash buyer can close by Friday, and they’re willing to pay more than you.
That’s a tough mountain to climb.
So when is a good time to buy?
I wrote a blog about this last week, it might be worth a short 4 min read.
I would say you’re ready to buy a home when you:
• Plan on staying put for 5+ years
• Can afford a down payment and your mortgage will be less than 1/3 of your take home pay
• You’re sick of making your landlord rich
Now seriously.....go check out my step-by-step guide to buying your first home.
Cheers,
David Fox
The Black Belt REALTOR
734-679-0174
Hit me up to buy or sell in SE Michigan!