The market has cycles. Right now is probably just past the bottom of that cycle, if you look at the economic forecasts, look at the stimulus package, look at the trends. First time Home Buyers are seizing the $8,000 tax credit and need to go somewhere, and the move-up Buyers are the ones who should be “Carpe diem”.
Today I showed four distinct but lovely homes in Bethel Township Pennsylvania. One property was 5,400 square feet, paver driveway, patios, front steps, 3-tier deck, granite kitchen, conservatory, two story family room, large but not wasteful master suite, finished walk-out basement, koi pond and beautiful topography in an amazing neighborhood. I showed a house like this two years ago, and that house was $1.2 million. Today this house – $764,000. Why should you buy it? Or another home valued in excess of $400,000 in our market? Because in another 10 years based on previous cycle performances you will have seen the value increase by 60%, then decline but end with an increase on average of between 25-40% depending on price point.
Where do you lose? You only lose if you bought in the last three years and are “upside down”, but if you have owned for more than four years, and have equity, this is the perfect time to grab your proverbial surf board, and paddle out to join the big boys for a ride on the North Shore. Real Estate always increases in value given the right length of time, but looking at the cyclical nature of the market, now is the time to be paddling quickly because the swell is building and you want to be on the front side of that wave, not the back side, catch the tube and hang on tight.
The result? You can get a $1.2mil home for $764,000, and in about five years will be back on that $1mil mark, by 11 years you should be approaching $1.3mil. Your return on investment? $536,000 for living and maintaining a home. Have your stock investments done that well?
So what are you waiting for? You want to wait until the market peaks again to get full value out of your current property, well then you will also be buying the peak value on the next property and won’t realize the true potential. Are you ready to move?