Yes...California real estate is expensive...again. It always does this...it goes up then down then back up higher than it was before it went down. So here we are again, back up above where prices were before the crash.
So if you didn't take advantage of buying after the crash, and have watched for the past 7 years like many, as prices have made their way back up what do you do now? Many people are discouraged and frozen in a place of inaction, wondering what they should do and what is coming next.
Will prices go down? Maybe.
Will prices keep going up? Maybe
There is some instability in our government. That instability is making some feel they should hold off from buying until they see what is going to happen, I understand. But...rates are still very low and it is your payment that you need to be concerned about as much, if not more, than the price of the property. Real estate prices are about income and supply and demand. If we don't have a huge spike in unemployment or lose some major industry in California then the demand for property is there. Many people want to live in California and the demand is usually quite high...there is a shortage of housing in many parts of the state. We have land constraints here that keep our inventory limited. We have an ocean to one side, ranges of mountains and lots of government land. All of these factors limit how much property there is and as people keep coming the supply tightens.
It is your monthly mortgage payment that drives everything. If you can afford the payment, and if you hold onto the property (as you should hold onto every property you buy) then now is the time to buy. It's always a good time to buy as long as you can afford the payment. Regardless of what happens to the market, if prices go down, then you keep making the payment just like you keep paying your rent. Eventually the house will be paid off and if you are smart enough to buy a 2-4 unit property, then the rent from the other units will keep your monthly outlay low and will help you pay off the property...and in 30 years or less you will have a piece of real estate that you own free and clear.
If you wait for conditions to be perfect you might be waiting for a long time. I remember some clients of mine back in 2009 wanted to wait to buy as they thought prices would continue going down and guess what...they waited too long and are still renting today. Once everyone realized the prices had hit bottom, buyers came out of the woodwork and started buying...quickly driving prices up. Once prices started rising there was a lot of competition and many people got frustrated and didn't buy. If my clients had bought back in 2009, or 2010 or 2011 or 2012 or even later...they would be sitting on hundreds of thousands of dollars in equity now but they wanted conditions to be perfect and in the end they got nothing.
Don't end up with nothing in the end. Owning property will save you. If you continue renting you will still have a rental payment in 30 years. If you buy, you will pay off your loan in 30 years (hopefully less) and then only have to pay for property tax and insurance every year. You will own an asset worth hundreds of thousands of dollars. If you buy now on a fixed rate your payment will stay the same for 30 years and then be finished. I can pretty much guarantee that your rent will go up over the next 30 years and you will have to keep paying rent until the day you die.
So if you didn't take advantage of buying after the crash, and have watched for the past 7 years like many, as prices have made their way back up what do you do now? Many people are discouraged and frozen in a place of inaction, wondering what they should do and what is coming next.
Will prices go down? Maybe.
Will prices keep going up? Maybe
There is some instability in our government. That instability is making some feel they should hold off from buying until they see what is going to happen, I understand. But...rates are still very low and it is your payment that you need to be concerned about as much, if not more, than the price of the property. Real estate prices are about income and supply and demand. If we don't have a huge spike in unemployment or lose some major industry in California then the demand for property is there. Many people want to live in California and the demand is usually quite high...there is a shortage of housing in many parts of the state. We have land constraints here that keep our inventory limited. We have an ocean to one side, ranges of mountains and lots of government land. All of these factors limit how much property there is and as people keep coming the supply tightens.
It is your monthly mortgage payment that drives everything. If you can afford the payment, and if you hold onto the property (as you should hold onto every property you buy) then now is the time to buy. It's always a good time to buy as long as you can afford the payment. Regardless of what happens to the market, if prices go down, then you keep making the payment just like you keep paying your rent. Eventually the house will be paid off and if you are smart enough to buy a 2-4 unit property, then the rent from the other units will keep your monthly outlay low and will help you pay off the property...and in 30 years or less you will have a piece of real estate that you own free and clear.
If you wait for conditions to be perfect you might be waiting for a long time. I remember some clients of mine back in 2009 wanted to wait to buy as they thought prices would continue going down and guess what...they waited too long and are still renting today. Once everyone realized the prices had hit bottom, buyers came out of the woodwork and started buying...quickly driving prices up. Once prices started rising there was a lot of competition and many people got frustrated and didn't buy. If my clients had bought back in 2009, or 2010 or 2011 or 2012 or even later...they would be sitting on hundreds of thousands of dollars in equity now but they wanted conditions to be perfect and in the end they got nothing.
Don't end up with nothing in the end. Owning property will save you. If you continue renting you will still have a rental payment in 30 years. If you buy, you will pay off your loan in 30 years (hopefully less) and then only have to pay for property tax and insurance every year. You will own an asset worth hundreds of thousands of dollars. If you buy now on a fixed rate your payment will stay the same for 30 years and then be finished. I can pretty much guarantee that your rent will go up over the next 30 years and you will have to keep paying rent until the day you die.
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