I've been asked this question a lot lately, I've really spent some time ruminating on this topic.

Many members of our older generations are untrusting of the current housing market. In ways, this market feels eerily like 2007, 8, 9. While us Millennials- the largest buying generation in history- have never experienced a "crash" or recession with our own money. Most of us were in high school or college. We felt the burden via second degree burns; maybe losing a house due to foreclosure, witnessing our parents stress over money, or watching a friend move away. Regardless, it's left a whole bunch of real estate PTSD.

We see article after article about rent rates spiking in Central Florida (some statistics estimating over 22% in just the last 24 months alone.) But we also know Millennials are itching to purchase, currently sitting on the sidelines waiting for things to improve. With interest rates as high as they are, the interest alone is adding hundreds of extra dollars to the monthly payment, making buyers apprehensive and slow moving. 

If you were lucky enough to have purchased a home during Covid, you likely have a sweet interest rate aka "the golden handcuffs." That crazy low rate is amazing if you plan on living in your home forever. But I can tell you from personal experience, the moment that second (or third!) baby arrives, that cute starter home with the 1.99% interest rate just started to feel really, really small.

On the other side of the scale, our long-time home owners likely refinanced during Covid and also have a super sweet, super low interest rate. But when the kids go off to college, that 5 bedroom home with a pool that no one uses just doesn't make sense. But neither does downsizing to a smaller home with an almost identical monthly payment thanks to the astronomical appreciation in home values we've seen over the last four years.

So where does this leave us? We've got a massive demographic of people treading water, with only those dealing with job transfers, divorce, death, etc. swimming around making moves out of necessity. But what about if you want to move? What if you need a change of pace, a change of scenery, a change of house? Owning one piece of real estate isn't a life sentence. In fact, us Millennials statistically won't live in our first house for more than 5-7 years. Making savvy buying and selling decisions, however, is imperative. This is your investment, your nest egg, your key to unlocking generational wealth for you and your family.

So I've compiled some pieces of advice I hope will navigate you through whatever step of this process you're facing: 

For The Buyers Who Want to Move OR The Move-Up Buyers Who Are Stuck:

• Get a professional valuation for your home and a net sheet to see what you're estimated to walk away with (by calling me, of course!) You'll likely be pleasantly surprised by how these numbers look. (In a normal market, you typically need to live in your house for two years to break even to sell, but in a hot market, it could be way shorter than that, especially if you've made capital improvements on the property.) 
• It's all about meeting in the middle- you're not going to find that shiny 3% interest rate again anytime soon, but could a 5% be palatable? With a series of negotiation tactics, leverage and a few tricks I have up my sleeve, I have no doubt we can "meet in the middle" on the interest rate you buy into. 
• Consider turning your current home into a rental, and using the rental income to offset the new, higher mortgage.
• Sell your current home, and use 100% of the proceeds toward your new home to lower your monthly payment & buy down the rate (and remember, you don't get taxed on capital gains up to $500,000 for a married couple- leverage this free money!)
• Look into new construction for "rock bottom" interest rates, large bedroom sizes, updated kitchens & bathrooms, and large floor plans.
• Start early to get a plan in place! When the right property hits the market, you want to be ready to pounce. 

For the Sellers Looking to Down-Size:

• Consider making cosmetic upgrades to your property to sell it for more money to attract younger buyers (be sure to ask me about Compass Concierge!)
• Consider purchasing in a less populated area, more conducive to a slower lifestyle to get the most bang for your buck. Also consider new construction homes for lower interest rates and "hassle free" new features & appliances.
• Start early to get a plan in place! When the right property hits the market, you want to be ready to pounce. 

For First Time Buyers:

• My advice to you is simple: if you can afford the home (comfortably!) buy the home. You can refinance later to a lower monthly rate OR refinance to a 15 year, keep a similar payment, and pay your home off in half the time. This is an incredible way to start building an investment portfolio. 
• As far as down payments go, I've had a lot of luck negotiating seller paid closing costs, rate buy-downs & decreased list prices to reduce your overall cash to close.
• Take a look and see how your current investments (stocks, crypto) are performing against local real estate appreciation. If appreciation is outpacing your stock performance, consider moving those funds to purchase your first home instead. 

For Everyone:

• Don't make rash decisions. Real estate isn't a "get rich quick scheme." Don't get caught up in the naysaying media hype and keep a cool head on your shoulders. The sky is not falling, and neither is the real estate market.
• Patience is key. We're working with about a month of inventory once again. Finding the right home might take a little longer than normal. The earlier you get your financial ducks in a row, the easier this entire process is. 
• Remember, it's not all about money. We're strictly talking about your primary residence here- where you wakeup every morning, create memories with your family, and rest your head every night. If you love it, if you can afford it, and if you can sleep easy with the decision, go for it!

For more real estate advice, or to get started on a customized game plan to set you up for real estate success, give me a call at: 407-466-2103.