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I want to buy a home but i am afraid of paying too much and a being in a housing bubble

Home Buying First Steps

What are my first steps to buying a home?
?? Thinking of Buying a Home? ?? So, if you have been thinking about buying a home but not really sure what your next step is… this is for you. The realty is the market is a bit tough out there for buyer and having a solid plan can make the difference of losing out on THE house or even just save you from seeing a bunch of a homes that are not a good fit. So what is that next step? Great question. Glad you asked. It’s simple, schedule a free strategy call with me. No obligation, and not a big sales pitch.
Avoid this common home buying mistake
?? Avoid this Home Buying Mistake ?? One home buying mistake I see almost every home buyer make is easily avoided. What is it… You will never guess; it’s starting your home search before knowing if you are in the sweet spot! By sweet spot I mean, do the types of home you are looking for in your budget exist? I have an easy exercise for you. Look at all the homes in your ideal wishlist that have sold in the last 90 days. If you can pick 3-5 homes out from that list that you would have considered you know yo
Buying a home and using the wrong Realtor may cost you thousands of dollars!
?? Thinking of Buying a Home? ?? So…. Who you work with can make or break the home buying experince. In fact here I a little known secrete, the top 1000 agents or so in Maryland sell over 70% of all the homes in MD! This is true at the county level as well. The truth is, getting a real estate license is easy to do, but truly representing clients and selling home month after month takes a lot of work. Why do you care - The reality is the top agents want to work with other top agents because they know the
Buying a home and using the wrong Realtor may cost you thousands of dollars!
?? Thinking of Buying a Home? ?? So…. Who you work with can make or break the home buying experince. In fact here I a little known secrete, the top 1000 agents or so in Maryland sell over 70% of all the homes in MD! This is true at the county level as well. The truth is, getting a real estate license is easy to do, but truly representing clients and selling home month after month takes a lot of work. Why do you care - The reality is the top agents want to work with other top agents because they know the

Hey, are you trying to buy a home this year but you're really kind of concerned because you're like, "Oh, there's a housing bubble. I had to wait. I don't want to buy at the top and then have everything come crashing down and be stuck in my home." If so, this is the video for you. So here's the thing. I don't think we're going to be in a housing bubble. And not only do I not think that, but I have the stats to tell you why and the top economists in the country don't think so either. So let's break it down. Here's a couple of different things. And we could talk about this for hours, but let's just talk about it for a few minutes, the top reasons why I do not believe we're going to be in a housing bubble.

Number one, it's supply and demand, right? That's like one of the fundamental things in economics is supply and demand. We have high demand. People want to go buy homes. And we do not have enough supply. Now, there's lots of different reasons. But what I'm going to say is it's going to take time for that supply to catch up. Some of that has to do with new construction starts. Some of that has to do with people being afraid to put their house on the market. Some of those people are slow to put their house on the market, because they're worried that they can't find something to buy, which just makes the whole thing even worse. There's a lot of different factors.

But the important takeaway right now is that there's simply not enough active homes. Now, homes are going under contract. We have lots of deals under contract and lots of things that are closing. But they're still not active enough. And that's really true in the entire nation. That's not just true like our little area right here. That's basically the entire country.

I do believe as the world opens back up, as we get this whole COVID thing under control, you're going to see more consumer confidence and you're going to see more homes come on the market, which is going to create movement, which is going to be good. But that's going to take time. I mean, I don't expect us to balance out at all or even think about really slowing down too much until the end of summer of 2022. Now, yes, I think it could slow down slowly through the whole time. But what I'm trying to get at is even if we put on another 10, 20 or 30% more homes right now, it's still not enough.

In fact, here's one statistic that kind of blew my mind. I was looking at a stat about forbearances. In January, if we were to take, and this is one of the last stats for forbearances, for people who were in a forbearance, they basically put paying their mortgage on hold for three or four months, if all of those people decided to sell their home tomorrow, guess what? There's still not enough homes to meet the demand. That's the thing. When we look at month over month compared to each year for the last five years, we are way low on the active homes. So you could take all the forbearances, put them on today, and we would still have less active homes than we would've any of the other times in the past five years. That's crazy.

So when people say there's low inventory, they're not kidding. So as long as we have low inventory and we have demand, it's hard to have a bubble. Because again, simply economics here. People want houses. So we got to give them what they want. So that's number one. That whole scarcity thing is a real thing here.

Number two is equity. Nationwide we had about a 10% appreciation last year for sales prices. That is huge. That's not normal. Like 3.6 or so is where normal would in the history of the last 120 years is, and we were at 10% nationwide. So if you fell on hard times and you can't afford your house and you gained 10% give or take, do you just let your house go and give it back to the bank? Or do you try to sell it and make a few bucks? The top economists are calling for about 10% appreciation again this year. So the average homeowner last year gained $24,000 of equity. And if they gain another 20,000 to $30,000 this year, if you gain all this equity, if you fell on hard times, do you just give the house to the bank and be like, "Here you go, bank," or do you sell it and walk away with some money? You're going to sell and walk away with some money, right? I mean, that's the logical thing to do.

So this notion that we're going to have a ton of foreclosures is just not realistic because of appreciation. Now, yes, will we have some short sales and some foreclosures? Yeah, of course we will. Maybe it's 15% of the people that were in forbearance. But that's still not that much. It really is not that much when we compare it to what the demand is and what the supply is. So I don't see the foreclosure thing being a problem. Again, interest rates are still super low. Even if they bump up a little bit, they're still not 5, 6, 7, 8%. We're going to be between three and four most likely this whole year. So again, rates are low. Demand is high. Appreciation is strong. I just don't see the bubble. I don't see how it's fundamentally possible when you break down the real economics.

And the last thing I want to talk about is unemployment, where a lot of people have gone back to work. Some people unfortunately have lost their job or are in harder times. But then we also have to look at, okay, do those people own a home? Are they renting? Where does that fall? And if they did own a home, are they maybe in that 15% that need to do a short sell or foreclosure? There's a lot of different factors in there. But I'll simply say that when you break it all down, it's pretty strong. It really is.

So I don't see a housing bubble coming anytime soon. I think it's a great time to buy if you can find a house that works for you. If you have any questions on that, you want to chat about it, I love this stuff, happy to engage in a conversation. Just click the learn more button below and we can jump on a strategy call and we can talk about how to buy in this market or how to sell in this market or whatever you need. So I hope that makes sense. I'm Brendan Spear with Caprika Realty. And I wish you the best in your home-buying journey. Take care.

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