9 Facts about housing market that will help you sleep tonight.

There is alot of anxiety and uncertainty right now but knowing these facts should help you feel better about the current state of the US Housing Market.

I presented this "letter" to my family to help them see that there is strength in the housing market. I wanted to highlight some facts that showed a lot of positives. My hope was this would reduce there anxiety about the current state of affairs. 

I wanted to present a thoughtful review of the effect of CO-VID 19 on housing. 

This "letter came about after talking with family, friends, and associates. I had a conversation with my Dad. He was really worried. 

Back in 2010, I helped him by a rental house in Denver CO.  You know the story...

We bought it at $110, today it would sell for $350! But he is so stressed out!

"Heck Dad, even if it dropped 50% overnight you would still be doing great" And we hadn't even talked about 0% vacancy since it was bought. 

There is nothing groundbreaking here. Funny thing though as I wrote it, for their benefit, it actually gave me comfort.

My family wasn't the only people seemingly freaking out. 

Pretty quick I saw a massive pullback by investors too (well we all did, didn't we, I'm not professing greater insight here). Novice and seasoned investors alike. The "unknown" was scaring them. 

But numbers are numbers - if they work then its a deal, right?

Of course, you have to change your numbers - no more guaranteed 5% gain - factor in a short term 10% downturn if you really want to be careful. 

Even taking into account 10% loss overnight - this deal sat on Facebook for weeks - it's still there (not my deal - I'm not trying to sell it - just pointing out how quickly things changed).

How does ARV 150K, Rent $1100 purchase @ 95 sound - No comments, no questions, crickets! NADA, nothing. 

6 weeks ago it would have sold in 8 seconds. 

So, maybe this can help your family see that it is not all doom and gloom.  Maybe you have a  new investor friend that feels it's all over. I'm not sure.

Best wished for 2020 - I hope you see the opportunities too. 

So here starts my letter to my family...

Dear Family,

Want to know exactly what will happen over the coming months?

So do I...

Well, unfortunately, there isn’t a crystal ball that we can turn to.

BUT

These facts have certainly reduced my blood pressure throughout the last few days.

Number 1:

Did you know the value of your house has never been higher?

Forbes reported in October 2019 “home prices have hit a new high” and wrote, “it now the highest median sale price on record”.

Yes, we’ll probably see them drop some but focus on the gains over the last 5-10 years. Be patient and they go up again - Just wait and see.

Number 2.

Many experts were saying that the market was going to cool off soon.

House prices cycle up and down. Then back up again. Many gurus were predicting a slow down anyway. It’s normal. Take a look at history - up then down then up then you can guess what’s next right?

Number 3

You can still sell your house.

It has never been harder for someone to find the home of their dreams. We have to be more cautious but agents, title companies, inspectors and appraisers are all working hard for you. They are getting your house sold. Call them and ask. You’ll see.

Number 4

You can still buy a house.

See number 3 plus, maybe now if you are proactive you can get ahead of other people.

Number 5.

The US Government just wrote a check for 2 TRILLION DOLLARS. This will help people pay bills, create jobs, keep the economy moving forward.

Number 6.

The Federal Reserve has cut interest rates to historic lows. Now you can refinance and make your payments more affordable.

Number 7

We have seen similar major events in recent history and the US economy weather the storm.

In-depth research by Ted C. Jones, Ph.D. looked at prior events like SARS and H1-N1 and found that despite these events the economy was able to continue on its predicted trajectory.

Number 8

The housing market is in a much stronger position than it was in 2008.

This is actually a good read and more pints to how we keep repeating. But the title worked for this part and I owned the image. 

Back then defaults were really high. Currently, defaults are at record lows. There are new rules and regulations that protect us. Banks are in a much stronger position too.

It is hard to know what is going to happen next. The headlines can make it all sound very scary. I have tried to cut through some of the noise by reading about the good things that are going on to help us all out.

Sometimes the news just focuses on the bad. I get it - that stuff sells. Right now though I just wanted to be able to relax a little.

Learning about these things has made me rest easier. I sincerely hope they will help you will too.

If you are interested in knowing more details about this I go into a lot more detail here. 

Take care.

SM

I am really proud of the pic so here it is again :-)