Seizing the moment in Real Estate
People make money in real estate in all kinds of market conditions, but they don't make it evenly across all parts of a cycle. It does matter when you buy and sell. Some of that is luck, but some is a matter of seizing the opportunity when it presents itself. Today's New York Times had a chart of the twenty top metro areas in the country for price appreciation in housing during 2020. Bridgeport was first, and New Haven was eleventh. We know that supply and demand were not in sync, and we know that people were leaving NYC to find more space in Connecticut. We also know that mortgage rates are very, very low at present, and that other markets around the country have already experienced large price increases in recent years, during which period we lagged behind and saw no increases. Finally, we know that moving to smaller cities is a current trend. In fact, the same edition of the NYT featured a large article about techies fleeing San Francisco for Austin. We are not as big as Austin, but we are also located in between two other major cities, New York and Boston in our case.
What do you deduce when you read the above paragraph?
One possible choice is that you decide that now is a good time to buy, especially where prices have not risen to the highest levels supportable. Bingo! Those who ride a market up, and we are still headed up, we believe, see large gains in the early years of ownership. Although you could also read the above to mean that you should buy anywhere, which is probably also true, there is more to gain in our region, since we began with such depressed prices. Some of you may remember when those relocating for work got sticker shock when they got to Connecticut, even in our area. Now many buyers have to spend extra, if they want to roll over all the equity they had in a previous home elsewhere. It stands to reason that there should be plenty of gain left for those who jump into the market soon.
As the stock market reacts to Biden's proposals for economic stimuli, think about real estate as well. Americans in 2020 paid down a great deal of credit card debt, because they weren't going out and spending money. Why not use those better credit ratings, and savings, to buy your dream home now? If you are a seller, there is no reason not to sell now, since you will be buying in the same type of market. You will be getting the same gains on a new home. Those who have been meaning to downsize should look to do so now. Spend these last few weeks or months before the vaccine decluttering and making plans to move. You will be glad you did!