Before you start gathering up your friends with torches and pitchforks, I am trying to make a point.
The answer to the question of “Are real estate buyers dumb”, is NO – Not in the least.
In fact, as the quote from Theodore Roosevelt states, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, and managed with reasonable care, it is about the safest investment in the world.”
President Franklin D. Roosevelt (1882-1945), it makes sense.
Today, this infographic by the California Association of Realtors(C.A.R.), does not show any correlation between homeownership dates and education. While, for most people owning real estate is a smart move, there is no relationship between those with “higher education” and those without.
Owning real estate is more than a smart financial decision. Of course, this is dependent on the current market, interest rates and employment. Some people bought at the top of the last real estate cycle. When they did the next month the first subprime bank fell and the lending and real estate market started failing like a huge set of dominos.
Other reasons that buyers comment about with owning real estate are these:
The space is yours – customize at will.
Believe it or not – you are now going to get more “custom furniture”, saying goodbye to renting someone else’s place.
There is “Forced Saving” – you will have to prepare for the “unknown”. There is no landlord to call when things break or when acts of “GOD” occur. This is actually a good thing and will “force” you build a nice little nest egg.
MONEY – as the quote stated – if you take real estate dynamics back, you will see a Large overall growth between initial money invested and spent as compared with the ultimate real estate ownership return.
Your payment does not change. Unlike rent, your mortgage payment will remain the same unless you change it by refinancing or have one of those adjustable rate mortgages.
Mortgage Interest Tax Deduction – this one is the cream of the crop. Some of our clients find out they are able to see a majority of the money they pay for their mortgage coming off of their taxes. This is a good thing for sure.
That was a mess and we are far from another one, at least I hope. Interest rates are very low, artificially so and will not remain at this level too much longer.
The real estate inventory of homes for sale is lacking. Ultra low numbers of homes for sale are keeping sellers happy and buyers very competitive with one another.
The real estate markets are very cyclic and adjust from one month to another. Just make sure you are getting the best advice from your trusted real estate professional.
I’m Connor with HONOR at REMAX SCVnest. I’m glad to be at your service and will provide for you security, protection by means of education within your real estate decisions. Be safe – talk soon and please share this article asking if Real Estate Buyers are Dumb.