In today’s article, I am going to give you all the basics you need to know about purchasing a home. In later articles, I will go into more detail about each factor.

The first question you should ask yourself is should you buy a home? There are several important considerations.

I know interest rates are going up and may be as high as 8% but remember rent is 100% interest. Also consider these factors:

1. You can do anything you want with the property

2. Appreciation benefits, including leverage of cash invested

Owning a home is an investment many people can understand better than buying stocks because they get the tangible daily lifestyle benefit of living in the home. However, the financial benefits are also significant and can be more substantial than stock investing.

As a home appreciates, it accrues faster than a stock might because you get the appreciation on the entire home’s value, not just the gain of your down payment cash invested. And, if you sell the house, you’d be exempt from paying any taxes on that money gained.

3. Tax benefits

The significant savings from tax benefits can often make owning the same as, or cheaper than, renting.

4. Mortgage costs stay the same as rents rise

5. Forced savings

“Over time homeowners build a net worth about 40 times higher than that of a renter.”

Knowing that owning a home is better in the long run than renting still means you have to find the right home! When looking for a home, it is best if you understand the kind of real estate market you are in. The first factor in a market is Supply and Demand. Most real estate markets are influenced primarily by job growth. However, our market is unique. We have relatively very low job growth which should make us a very stagnant market. But Fort Liberty, which at times does grow, always moves soldiers in and out of the market. On average Fort Liberty creates about 5,000 house sales each year. That is 10,000 transaction sides (5k buyer sides and 5k seller sides).

Quick market review of where we are today:

Our Existing market (homes that are not new construction) is still under-supplied up to $500,000. This means more buyers are looking for existing homes than there are homes for sale under $500k.
New Construction 2023 will be the second-highest-selling year in eight years. New Construction is not as under-supplied as existing is, but is approaching a balanced market. That means the right number of new homes is being produced for the right amount of buyers.

The big challenges to New Construction are the cost of land, land, materials and labor

So, if you are going to buy in our market, how are you going to make a safe and wise purchase?

What are the factors that make a home valuable?

For instance, just because existing construction is undersupplied up to $500,000 does not mean I can sell my home at $500,000.

What does the buying market think of my location?

What does the buying market think of my Neighborhood design?

What does the buying market think of my House design and features?

Knowing what makes for a good location, a good neighborhood design and a good house plan will enable you to purchase a home that your family will enjoy. It is a safe and wise purchase that can be sold in the future and build your wealth.

Next time we will discuss what makes a good location, a good neighborhood design and a good house plan.