Keeping realistic expectations is the key to purchasing real estate!
I like how this post reiterates that real estate isn't an investment. I sometimes find myself reminding buyers that the main purpose for the purchase of a home is to have somewhere stable to live. The other is so that you won't have to pay rent into your later years when your income and work potential are going down. How many of would be okay paying rent in our 60's, 70' or 80's and beyond?
When I started selling real estate in 1984, I bought houses for a living. I was not a flipper per se, but I would buy a house at retail, live in it for a year or so, and then sell it for a profit.
The assumption at the time was that all real estate would appreciate in value, because they couldn’t build homes fast enough to meet the demand for them. It didn’t matter if interest rates were in double digits; people needed housing and so just about anything would sell!
Fast forward to 2010: Interest rates are at an all time low, housing prices are depressed, and yet homes languish on the market for months or even years. There are simply too many houses on the market for the paucity of ready, willing and able buyers.
And part of the reason that potential buyers are unwilling to commit to a purchase is the old notion that real estate is an investment and a commodity.
You may not be able to live in a home for a year these days and then sell it for a profit, but you can certainly guarantee a low mortgage payment for the next thirty years. It is absolutely the best hedge against inflation imaginable.
Having realistic expectations from the beginning of a housing search can allay the fears of even the most reticent purchaser.
Because even at face value, a real estate purchase can be a very wise decision!
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