I’ll Be Back?

“I’ll be back”…Remember that famous Arnold Schwarzenegger line from the movie
Terminator (1984)? Well, he may have come back, but those interest rates? They aren’t
ever coming back.

All that “free” money pumped into the system that wasn’t free at all? That’s never
coming back.

And what happened that whole time? The prices continued, and continue to, escalate.
Inflation is inflation. If you had $100 in the year 2000 it’s worth $70 today. The coffee
you bought today is more expensive tomorrow because inflation.

This isn’t good or bad news, it’s just reality.

There are an estimated 9 million first-time homebuyers between the ages of 26-35
sitting on the sidelines waiting to buy their first home until interest rates normalize.

According to Lawrence Yun, the head economist at the National Association of Realtors,
these rates are the new normal.

So I want to address this head on, specifically to first-time homebuyers (whether that’s
you or someone you know – forward this email to them).

First, let me lay some truths into this conversation:
1. This does not mean you need to go buy a house. Everyone’s scenario is
different. Let’s have a conversation.

2. Recognize how much perception impacts your decisions. IF interest rates were at
8% and came down to 7%, tons of buyers would flood the market. But since they
were at 6.5% and now up to 7%, lots of buyers are sitting tight. Same rate,
different perception. Don’t let perception dictate your reality.

3. The longer you wait, the more expensive it becomes. You are battling multiple
fronts as you wait to get into a home. First, inflation. 10 years ago, $100 was
$100. Today, you’d need $139.57 to have the same buying power. So, as you
wait, each dollar you have becomes less impactful. Second, appreciation. Since
World War 2, there have only been 6 years where home prices went down. Every
other year, home prices grew. It has been 81 years since the war ended…so 6
years home values went down while 75 years home values went up.

4. If, or when, interest rates drop (which most buyers are waiting on), I guarantee it
will flood the market with more demand. This will then push home prices up
again, force bidding wars again, and effectively negate the interest rate drop.

Here’s the mindset a first-time homebuyer needs to have – you’re not going to get
your forever home, you just need to get in the game. I wish you could get your dream home, and you can, if you have a million dollars in the bank. For most of us, we
simply need to get in the home ownership game.

The first house is what sets you up to get the second house, then the third, then finally
the dream home. It’s the natural order of things.

If you’re renting right now, ask yourself, “How much do I like this place?” and then ask
yourself, “Is renting financially helping me long-term?”. Most people I’ve spoken to say
the place they are renting is ok and there is no long-term financial benefit to renting.

SO, here’s your job first-time buyer – get in the game. Do not be unrealistic at getting
your forever home (only 2% of 30 year mortgages ever get fully paid off anyways, a.k.a.
98% of people move and don’t keep the house “forever”). If your current rental is just ok,
then go find a house that’s just ok. But here’s the big difference – you shift your “bad”
financial benefit of renting to a “good” financial benefit of owning.

If you ever want to get to that second house, you’ve got to own the first house. Buy a
house today, and 5-7 years from now (or however many years), use that house to
upgrade into the second house. Then 5-7 years later, use that second house to upgrade
into the third house. Keep doing that until you land where you want to be, that’s how the
math happens in real estate.

The point is this – too many first-time buyers are on the sideline and it’s only going to
get more expensive. My heart for you (if you’re a first-time buyer or any buyer) is to
lock in on a home before it gets even more expensive. Today is the least expensive a
house will ever be. Tomorrow inflation and appreciation make it more expensive.

We want to help you get in the game. Not because it’s fun to buy with interest rates
where they are, but because we want you to be in position 10 years from now, to buy
that better house you’ve had your eye on. We want to help you change your financial
future by changing your address and better yet, owning that address.

P.S. This was written by me, so if you find any misspelled words or grammar mistakes, please don’t blame ChatGPT