WEST CHESTER, PA – WHY OWNING A HOME IS A SMART INVESTMENT
As the world comes out of the COVID-19 pandemic, many people are looking to invest their money in ways that are safe and secure. One investment that experts predict will see positive growth is homeownership. In this blog post, we’ll explore why owning a home is a smart investment in 2023, and we’ll look at some of the key factors driving positive growth in home prices. We’ll also examine the benefits of owning a home, including the potential for appreciation and long-term equity growth, tax benefits, and more. Finally, we’ll offer some practical tips for successful homeownership and explain how growing home equity can positively affect your net worth.
Key Factors Driving Positive Growth in Home Prices
The housing market is constantly fluctuating, and this year has been no exception. Earlier forecasts predicted that prices would remain stagnant or even fall, but recent data from six organizations and a survey of 100 economists, investment strategists, and housing market analysts suggest otherwise. The results indicate that prices will see a positive growth of around 3.3%. It just proves that sometimes, even the experts’ predictions can be wrong. The good news is that the market is expected to remain steady and even outperform previous expectations. So, whether you’re a buyer, seller or just interested in the housing market, it’s always good to keep an eye on the trends and be prepared for any changes that might come your way.
Why Is This So? Two Reasons:
- There are few homes for sale and
- There are more buyers than sellers which means that homes will sell in about a week if they are properly marketed and priced.
Benefits of Owning a Home
Owning a home isn’t just about having somewhere to live. It also offers significant financial benefits. For example, you can deduct your mortgage interest and property taxes from your federal income taxes, resulting in significant savings. Additionally, owning a home offers the potential for appreciation and long-term equity growth. In other words, as your home increases in value over time, your net worth will increase as well. Owning a home also provides a sense of security and stability, as you have control over your living space and don’t have to worry about a landlord raising your rent or asking you to move out.
How Home Equity Affects Net Worth
Home equity is the difference between the current market value of your home and the amount you owe on your mortgage. As you pay down your mortgage and your home increases in value, your home equity increases as well. This can positively affect your net worth, which is the total value of your assets (including your home) minus your liabilities (such as your mortgage and other debts). For example, if your home increases in value by $50,000 over five years, and you pay off $20,000 of your mortgage during that time, your net worth will have increased by $70,000. As you can see, growing your home equity is an excellent way to increase your net worth over time.
For real live examples, check out this chart of median sales prices in the West Chester area:
| MEDIAN SALES PRICE, WEST CHESTER AREA, SINGLE FAMILY | ||||
| Primary Year | Sale Price, Median | Annual % Change | Cumulative % Change | Equity Buildup. |
| 2014 | $415,000 | |||
| 2015 | $417,500 | 0.6% | 0.6% | $2,500 |
| 2016 | $423,500 | 1.4% | 2.0% | $8,500 |
| 2017 | $441,000 | 4.1% | 6.3% | $26,000 |
| 2018 | $469,900 | 6.6% | 13.2% | $54,900 |
| 2019 | $480,000 | 2.1% | 15.7% | $65,000 |
| 2020 | $510,000 | 6.3% | 22.9% | $95,000 |
| 2021 | $580,000 | 13.7% | 39.8% | $165,000 |
| 2022 | $640,000 | 10.3% | 54.2% | $225,000 |
| 2023 | $693,000 | 8.3% | 67.0% | $278,000 |
| West Chester, Downingtown and Great Valley School Districts | ||||
| All Positive Years since 2014 | ||||
| Trend Expected to Continue | ||||
In nine years after buying the median priced house in the West Chester area, the equity build up from value increases alone is $278,000.
And that performance is also very safe. I also see this trend continuing over time.
here is what you need to do to make the right decision for you
- Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
- Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
- It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
- Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
- Do I think that now is a good time to buy that first house or to sell and make that move up buy? Again, absolutely yes.
- To get a quick update of what is new in real estate, click here to check out our new videos.
- Interested in what recent clients think of my service? Click here to read what they say.
- Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
- No doubt, the housing market is changing, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening.
- If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor. Again we can do that in person or on the computer.
- One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
- There are still clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
- There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.