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Now that the real estate market is in great shape and the economy is doing well, it's not a bad time to take a look back at the housing crisis and figure out what we've learned:
1. Your home may not always be an investment. This may sound counter-intuitive coming from a real estate agent, but if you buy a home in an area where there is a massive number of months worth of inventory, you're buying into an area that's trending down, which means you're buying into an area where properties will be worth less down the road.
2. Every homeowner should have an emergency fund. This is pretty obvious, but incidental things happen. Make sure your mortgage payment is something you are more than comfortable paying each month, and that you can afford to pay it even if things take a downward turn.
3. Beware of risky mortgages. An example of a risky mortgage is, say, a variable-rate mortgage that adjusts every year. You might have gotten the loan on day one at 4.5%, but it may rise above 5% within a few years, which causes the cost of your home to go up too.
4. Buy what feels comfortable. Just because you qualify for a loan to buy a $400,000 house doesn't mean you can actually afford it. You don't want to give up a huge percentage of your income in order to make monthly house payments.
5. Home ownership is not for everyone! This may sound even crazier coming from a real estate agent than number 1, but it's the truth. On average, home prices go up 3-4%, so when you take closing costs into account, you're unlikely to make money for quite some time. You only want to get involved if you're comfortable enough financially.
If you have any questions about this topic, or if you need real estate assistance, please don't hesitate to reach out to us. We would love to hear from you!