Many Things Have Change In 4 Years - The IMPORTANT THINGS NEVER CHANGE.
By Brad Rachielles
Remember back four years. 2007 was a significant year.
- The Colts defeated the Bears in Superbowl XLI.
- The iPhone was introduced.
- That was the year that the final Harry Potter book was released.
- Barry Bonds hit 756th home run, breaking Hank Aarons all time record.
- On October 9th the Dow Jones Industrial Average closed at an all time high.
- Family values were high with home ownership ranking as one of the most important priorities even though the average selling price of a single family residence in the Upland, CA area was $535,319 in July of that year.
I remember that year as a REALTOR(R) because people were lining up for open houses. Offers were being written and homes went into escrow within days of hitting the market. Home values had been increasing from 15 to 20% per year or more. Interest rates were high. But, home ownership meant having your kids in a great school. Home ownership was an important "next step" in maturing. Home ownership meant giving your kids the stability and home needed for a solid family... just as your parents had realized. Home ownership made that family a part of the community and home ownership was the biggest contributor to financial well being (even disregarding the piggy bank effect mentioned).
Financing was easy.... too easy, and folks with equity were using it to buy luxuries. Their home was a piggy bank, and that was an unfortunate event of the times. That was the year that home values ceased their meteoric climb and values started their declined, equity started to vanish and those recent buyers who had taken the coins out of that magic piggy bank were hit hard. It was a terrible lesson, but a lesson it was.
THAT WAS THEN - Some things have changed.
- The iPhone has lots of competition.
- The Dow Jones has wobbled and is currently low.
- Facebook and Twitter are big parts of our social lives.
- Easy loan qualifying is gone, but qualified buyers don't have a problem.
- The average selling price for a single family residence in the Upland, CA area was at $299,589 last month and interest rates are either at, or slightly under 4%.
- Distressed properties make up about 50% of the inventory... and the purchase process may take longer for a short sale
It is apparent that home owners of today have taken a big equity hit. In some areas, new home builders have stopped producing new homes because they can't compete with the pricing and value of what is on the market, and more distressed properties will be entering the market for some time, albeit slowly. Numerically, it would be unimaginable that values could fall significantly from here forward. Will we see the 15 to 20% increases in home values each year? Not likely. Those increases were unrealistic and certainly not sustainable. I mentioned that lessons were learned. Sane increases like most places is probable in the future.
WHAT DIDN"T CHANGE
In the long run, home ownership has fantastic benefits, and THAT HAS NOT CHANGED. BEYOND THE NUMBERS...
- With rents climbing, owning is very likely less expensive, and at the end of the year. you are just that much closer to "NO Mortgage at all". The way mortgages work, your first years are paying mostly interest... think tax deduction. You're not paying to build someone elses equity. It's your home.
- You have a place that the kids can truly call home. Paint their room with their colors. Plant the garden you've wanted. Want more security? Want to expand a room or build a BBQ? Do it. It's your home. Enjoy the ability to make your own choices. That's freedom.
- You become the master - no more rent increases... or parking space problems.... or doing laundry in public quarter eating machines... or putting up with loud neighbors through paper thin walls. It's your home.
- Ownership lets YOU pick the location... maybe a quiet country home with land for spreading out.... It's your home. Hard to find an apartment with that benefit.
THERE IS MORE TO THIS
Over the next few weeks, I'll be sharing more with you. We'll look at the financial side of ownership v. renting, What will happen if the prices go up... or down, What is a buyers market, and are we in one in SoCal?
If you can't wait for the articles, CALL ME at 909-816-7333 and we'll talk about the unanswered questions you may have. Many Things Have Change In 4 Years - The IMPORTANT THINGS NEVER CHANGE.
Did you like what you Read?
It's All About YOU! Brad Rachielles, REALTOR, Upland, CA
Brad Rachielles, REALTOR. Helping Inland Empire Buyers and Sellers with their Real Estate needs in the Communities of: Upland, Rancho Cucamonga, Fontana, Claremont, Ontario, Chino, Chino Hills, Pomona and La Verne, CA.
Web Page: http://www.BradRachielles.com