Hi friends,
What a ride we have been on these last five years. Being deeply involved in a notoriously volatile industry for over 42 years has taught me many lessons. The housing market is one of the few markets that personally affects almost every person in the United States. Whether you rent or own, you are subject to the gyrations of the housing market. Many of us get frustrated with the ups and downs of home pricing and we are constantly trying to guess the right time to buy or build a home. Over the last 42 years I have observed a couple of trends that ARE CONSTANT AND PREDICTABLE in the housing market.
1- The one constant of housing is that WHATEVER THE CURRENT MARKET CONDITION IS, IT WILL CHANGE. Short term the market moves up and down.
2- Over time, the market and existing home values ALWAYS GO UP. Just ask grandpa how much he paid for his home back in the day.
3- The price of housing is ALWAYS DETERMINED BY CONSUMER DEMAND AND AVAILABLE INVENTORY. This is not only national conditions but mostly affected by local conditions.
Real estate investors watch and try to time the market. They move in and buy houses when the price is low. They are less discriminating about the home features because they wont live in them, so it works for a short term buy low, sell high business model. For most us home buying is a long term purchase. We want to live in and love our homes. We want certain features and locations that will become a place of refuge and peace for us and our families. To find the perfect home, at the perfect location, at a fire sale price is a very difficult if not impossible task. You could potentially miss many perfect opportunities for long term value while trying to make the perfect short term fit.
My suggestion is to look at the purchase of your home in a different light. HOW WILL THIS PURCHASE BENEFIT ME OVER TIME. Even though the price of housing in Utah is high, where will it be next year, in 5 years, in 10 years. The Utah housing market right now has about 30,000 buyers needing housing and can not get into a home. If you had a lemonade stand and 30,000 people wanted your lemonade, would you be able to raise your prices and still sell lemonade? Until the demand for housing in Utah is met, prices will continue to increase. That means two things for us.
1- If we buy a home now, even though the prices are elevated, our equity would most certainly increase over the next years.
2- If we wait to purchase until next year, with all these people needing housing, we will pay even more for the home and miss the equity we could have built over that year.
Over the next few months we will talk more about our Utah market and what it means for you. Overall I am EXTREMELY OPTIMISTIC about our future. If you can afford it, I would urge you to look for and build or purchase you home as soon as possible to capture the “wave” of equity that is coming over the next 10 years. I believe it will be one the best decisions you will make.
Sincerely,
Steve Pierce
Pierce Design + Build