8/18/23
Happy Friday, Friends!
We’re fast approaching the start of the new school year, and if your family is anything like mine, we’ve made the sudden switch from “we have the whole summer!” to “holy smokes, the summer is almost over!” Nate and I took the day off yesterday and brought the kiddos to the zoo yesterday. While it took a bit of extra prep work to remove myself from my business for the day, I had an awesome time! #worthit
MEGA CAMP
I’ve been trolling the KW social communities hoping to glean some nuggets that I can take away from other peoples’ experience. Here are a few big notes:
- 70% of homeowners have at least 50% equity in their homes right now. A lot of homeowner don’t know how much equity they actually have
- $50K in car debt actually translates to about $200K in buying power for a home.
- It’s ALWAYS the right time to buy real estate.
The car thing confused me a bit (I’m sure I am not the only one), so I did some more digging to find out exactly what Gary was talking about. I found this in Inman:
“Let’s just say you bought a $200,000 home in 2014. You put 20 percent down with a 4 percent mortgage rate and you own a truck you bought in 2015,” he said. “Your mortgage payment is $1,597 a month and your truck is paid off. Let’s say that you stayed in your home but you decided to buy your dream car, so you’re in your budget home and driving your dream car, a 2022 Jeep Grand Wagoneer. Those are great-looking cars.”
However, Keller said the estimated car payment with an 8 percent interest — $1,824 — is more than the mortgage payment — $1,597.
“Your total debt is $3,300 a month,” he said. “Let’s say that you flip it and you keep driving the truck and instead you buy your dream home. Look what happens. You keep your truck, sell your home now worth $400,000 and buy your dream home for $650,000. You use your full equity as a down payment, you pay a 7 percent mortgage and look at that — it’s only $50 more per month. $3,350.”
Gary thinks we’re approaching what he calls a “rolling recession,” meaning some industries will experience a full recession and others will be doing just fine. The economy as a whole is healthy but parts of it are not. The Real Estate Market will definitely be affected.
80% of Americans believe that now is the time to buy a home, while many people, influenced by the media, are still trying to ‘time the market’ and find the magic hour to transact. Gary refers to this as a “fools game” because nobody has a crystal ball. “Why would [consumers] think they can predict the economy? Right timing is a fool’s game. Yes or no? Yes. Timing is a fool’s game. You should always be looking to buy the right piece of real estate,” he added. “You should never walk around and in your mind go, ‘It’s not a good time to buy.’ That makes no sense to me. If you study history, history says that is (sic) uninformed.”
I hope you found this information helpful for when you have to navigate market condition conversations with your clients and sphere. Check out our upcoming events below, and please reach out if you have any questions.
As always, it is an honor and a privilege to be in business with each and every one of you.
Best,
Coach Lins
