So we've all heard it, Right! Real Estate is NOT the investment it once was. Who would want to buy a
home now, right? It's true that some folks should not be considering buying a new home if one of the
family members have been laid off, but what about the other 90% of us? Let's look at the average sales
price in Bucks County from 2001 - 2010.
It's true if you bought your home in 2005, or later you'd have a hard time selling it today, but buying a
home should never be a short term investment. Heck buying and selling homes costs money and to buy
and sell in under 3 years is tough even in a strong market. But what about those folks who bought before
2005? Most of them are looking at equity in their homes as long as they didn't use them as ATM's.
In fact, over the 9 years shown on the graph you'll see that single family homes in Bucks
County appreciated at approximately 5% per year and that condos at nearly 8%. Please let me say that
one more time.
If you purchased your home, or condo in Bucks County in 2001 on average your home
appreciated between 5% and 8%. You don't get that type of return leaving your money in the bank and
the bank doesn't let you live there. In fact, the rate of return on investment is even higher because you
probably didn't pay cash for your house, right? If you did good for you! But the rest of us probably put
down 20% at max which means in 2001 you put down approximately $45,000 for your 20% down payment
and maybe spent another $10k on closing costs for a total of $55,000 out of pocket. Today your home is
worth about $100,000 more and you've been paying down your mortgage for 10 years.
In 2001, rates were about 6% so if you put down 20% on a single family home in Bucks County costing
$225,000 then your mortgage including taxes is about $1,330. In the 9 years you've owned the home
you've paid the balance down to $154,115 and today it is worth $324,080 or to put it another way you have
$169,965 worth of equity in your home, and you are still only paying $1,330 a month on your mortgage.
It never increases like rent does, and think about what you get for $1,300 today. A 2 bedroom condo in
Newtown. Definitely not a single family home that's for sure. And imagine being the renter who has paid
off their landlord's mortgage year after year with nothing to show for it. Who's shoes do you want to be in?
So let's review again. Real Estate is not the investment it once was. It could never keep that pace
because eventually at 10% appreciation per year first time home buyers would never be able to buy a
home which means sellers would never be able to buy the move up house and now nobody is moving.
But after only 9 years, and looking back after the bubble burst we can say hey if I bought a home in 2001
look where I'd be today.
If you want to position yourself in a similar way in the years to come take advantage of the
best market to buy a home in years, or even most likely in our lifetime and give me a call Dale Cosack
#215-860-4067.
To search for homes for sale in Newtown, or the surrounding Bucks County area checkout:
Search For Homes In Bucks County
You can also check me out on Facebook
Also checkout my websites to learn more about me, The Bucks Condo King & The Cosack Team
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