Real estate prices have been soaring over the past few years and that has plenty of people worrying about a bubble coming. Rather than stressing over something that may or may not happen, take time to enjoy the rising home values. Let’s talk about how you can do that and why we think this is a great thing.
(Click the featured times below to jump forward in the episode)
Despite everything that’s happened over the past few years, home values have remained incredibly strong and it’s hard to find a place where demand is greatly outpacing supply.
But not every homeowner is excited about this trend. We are less than 15 years removed from the housing crisis of 2008 and people are worried another bubble is on the horizon. That along with the challenge of trying to find a home that you can afford and that you can win a bid on has caused a lot of frustration.
On this episode of the podcast, Dan is going to tell you why he thinks these soaring prices should be enjoyed.
Let’s start with the talk of a bubble. A bubble is a myth when it comes to matters of economics. Just because something rises in value doesn’t mean it has to come back down in value. Markets fluctuate naturally but look back through time and values rise over time. What happens most of the time is that there’s a news item that drives prices down. It’s a reaction to that rather than a pullback just because something got too expensive.
But if you are truly worried about a bubble, you could always sell your home. The gains you’ve made will likely offset any increase in purchase price on the next house you find. If that’s not an option, you could always park the profits in the bank and finance the new home. Even if the value of the new home goes down like you’re worried about, your mortgage payments won’t change and that means your budget won’t be affected either.
The bottom line is your house is an asset but it’s also very illiquid. The only way to benefit from that growth is to sell it or borrow against it. We aren’t necessarily suggesting you do either, but you should also enjoy this time period for the growth that many people are getting to benefit from.
If you want to discuss the options you have for your home, get in touch with us and we’d be happy to work through it with you.
Listen to the entire episode or click on the timestamps below to hop around to different topics.
[2:02] – Not happy about high prices?
[3:40] – Is this a bubble?
[5:17] – Tangible asset
[5:56] – Rise in value is a good thing
[7:40] – Emotions drive decisions
[8:53] – What you need to understand
[10:12] – What you can do now
The Full Picture:
“News events such as this will typically trigger a reaction from the markets if they’re fully unexpected.”
– Dan Cuprill
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