Should You Buy Real Estate in 2024? My Honest opinion

Welcome to this episode of Real Estate Revolution. Let's talk about buying in 2024 and why it's critical, not for the same old bullshit real estate agent reasons. Let's get into it. Alright, let's talk about buying in 2024. There are many of you that have sat on the fence riding these interest rates. And some of you are probably the same people that rode the fence when they thought prices were going to crash. And, and that hasn't happened. And nobody foresaw interest rates nearly quadrupling at some point in time in the market. Right? So I think some people are living out there with regret of not purchasing when they maybe could have, when things were a little bit looser on the appraisals and things like that. Because affordability wise, it would have been better to pay a higher price for the house with a lower interest rate than it would have to have the market crash and pay 8% interest on a property. So, so why should you buy in 2024 and not for the same old BS reasons. Cause anytime's a good time to buy, blah blah, blah. Let's really break it down like the logistics of why it's a good idea to purchase in 2024. You see, as we go into this current market and the interest rates are still hovering in the mid sixes, people still aren't off the fence yet as far as the buying and the affordability goes. They're still gonna wait and see. And here's my prediction. What's going to happen is right now in January we still have some Runway of where you're still able to negotiate some closing costs, some repairs as a buyer. And yes, you're probably going to get a 6 to a 6.5% interest rate depending on the variables of your credit and your income. Right. So you're negotiating, let's say 10, 15, $20,000 depending on the price point. You have those negotiation rooms right now. We didn't during COVID You were just the big middle finger. If you want to buy this house, it's as is where is and you can go F yourself if you ask for anything. I'll get to the next buyer that's in line. Right? That's what it felt like. So now we're in a state where you can look at a couple of different houses. You can make a decision. You can go, hey, I want the best deal, not the best house. And you can make that decision. Negotiate to your heart's content. Somebody's motivated out there, guaranteed. Right. And remember, when we're Purchasing, we're looking at the investment side of things and let's look at dollar to dollar now. Okay, so at six and a half. Yes. Your payment's a little higher. Let's say it's $1,000 difference a month right now. Yes. A lot of money. I totally understand. Over 12 months it's $12,000. Okay. Now if the interest rates go down a point to 5.5%, you will see buyers drive back into the market. You will probably see multiple offers on some properties again and you will cease some of the negotiations and some of the things you could have negotiated before. Now here's where it changes. You can't change the negotiation or the market style when it comes around. It just is what it is. During COVID it was all sellers market, right? The buyers were just held at gunpoint. In this current market that we're at, the sellers aren't held at gunpoint. But you certainly have some wiggle room to move things around and go, hey, you know what, I like this. I want to negotiate on it. You know, maybe I'm going to back out for this because as a seasoned investor and a flipper, I'm going to make more concessions right now to get rid of that long term debt, you know, on that property. So there is some more room to negotiate right now when it comes down to those. Because you want to get it done, you want to move on to the next project. So some people with vacant homes especially, they want to get done, they want to move on. So keep that in mind as you're going through that. So the prediction is, is that we're going to go into lower rates. The feds have talked about cuts five to six times this year. Who knows? It's anybody's guess. Here's the big thing. If all of a sudden rates start to drop, the buyers that are sitting on fences are going to come into the market pretty quickly and it's going to cause a reduction in inventory, it's going to cause prices to potentially go up, it's going to cause multiple offers, it's going to take away negotiat room. Now let's say the worst case, right? Nobody thought it would happen during COVID but let's say it happens. Let's say all of a sudden the price start getting pushed up, people start paying over appraised value and we start going back into this crazy and all of a sudden the price is 5 or 10% higher now than it was six months ago, a year ago. Now the rate's lower. It's more affordable. But you could certainly change the rate of the house that you bought six months prior. So here's the, here's the difference. Like, let's, let's put this in perspective. If you bought a house for $400,000 today at six and a half percent versus a house, if all the predictions that I'm thinking are going to happen because it's an election year and all the cycle, let's fast forward to August, July, August, September. Rates are down to five and a half. All of a sudden the same $400,000 house is 425. And you don't get any closing costs, you don't get any repairs. So technically the spread is about $35,000 in difference in what you negotiated in repairs and concessions here in January versus what you may or may not be able to do in August, September, July. You know, somewhere down that road, if that happens now, that's just prediction, right? And it's just kind of watching what's happening because everybo the prices were going to crash, the market was going to go into foreclosure hell and all these things were going to happen, but none of those things lined up because none of them lined up like 2008 did. 2008 was just bad loans, plain and simple. Bad loans and greed is what caused 2008. We have nothing like that. We have too much equity, you know, too many great loans out there. So you're not seeing the inventory issues that we thought we, that many people thought we were going to see. So we still have a shortage of inventory. And, and that's only because of affordability of buyers. So if I'm a buyer and I'm on the fence and I can afford it, I'm going to jump out and I'm going to negotiate the best that I can in the market right now that I know versus hoping that something is going to change in the future. Because we all saw what happened when we hoped something was going to change in the future. When Covid numbers happened and all of a sudden rates went through the roof, everybody scattered. It slowed everything down, which is exactly what the Feds wanted to do. And it caused a lot of people to lose their hope and their dream of being able to buy a house because they thought that one of the other factors was going to change in their favor. And it got worse. Because the reality is we buy homes based on payments, not on prices. If I can afford the payment, the price range is the price range, whatever that is. And so that's really what has happened here and it's made things unaffordable. Because when you look at a half a million dollar house and the payment is now $6,500 a month, well, that's pretty out of reach for a lot of people. Now back in Covid, when rates were 2 and 3%, that same mortgage was 23, $2400 a month. Much more in reach to most people in comparison to current rents. So that's kind of my prediction and my suggestion and my opinion as to why you should consider buying in 2024, whether that's an investment property or a primary residence or keeping your current home, whatever that strategy looks like. I want to help you. My team wants to help you. So if this is something you're listening to and you're thinking about doing something and you want to talk through a strategy like what does it look like and run through the numbers. Let's connect DM me, text me and let's connect my number. You can text me on 602-845-4575 and I'll get back to you and we can set up a time to do a strategy. Till next time, thanks for joining me and I will see ya.