The Expert Podcast

You may be wondering well why should I buy a house for 200,000 when that may not seem obvious to me so here's seven good reasons why you might want to run out right now and buy a 200,000 house especially if you're renting.

The first thing is if you're waiting to find an affordable city to move to according to the New York Times the next affordable city is already too expensive this is an article about Spokane Washington which was the next go-to place it's in the Pacific Northwest maybe close to Seattle maybe a nice kind of rural community but according to the article too late home prices have jumped 60 percent in Spokane and it's already behind Austin where a lot of people have already looked at Austin.

The point of the article is even if you weren't looking to move to Spokane or Austin any city that right now is affordable at some point will not be affordable because the housing crisis that people are seeing in places like South Florida New York Chicago um Austin people are looking well where's the next place that's cheap people are willing to work anywhere and live anywhere because of the current market and we'll look at that in another reason.

The next reason that you might want to buy a 200,000 house right now is because if you're waiting for the market to go back down according to many experts here's one saying housing prices and interest rates aren't going back down according to an expert the mortgage rates just went up and you might think well that might lower the house prices but it's not things aren't going back down DLB Financial Services CEO told Yahoo Finance Live so we have to quit thinking this is a bubble and start thinking this is how it is now this is the real thing that's a good quote right there.

Another supporting part of the article of that is on Life Hacker says don't wait for a housing market crash this market is not going to crash the best time to buy is now according to the article prospective home buyers who weren't lucky enough to get into the game the hope of a housing market crash might be the one thing to hold on to right that might be why you're waiting because you think it's going to crash according to the experts it's not going to crash and the reasons why are all listed in this video and also in previous videos.

But even though it's tough to predict what's to come experts believe that we're in a seller's market for a while how long well it could be years before we see a normal housing market even this is a little bit misleading because it says normal well what does normal mean three years from now normal might be what it is today it might go up a little bit and come back down to what it is today so it's unlikely the prices will come back down because this is an example of a person who owns a house and they got this letter that says I want to buy your house and they're just sending random letters to people saying hey can I just buy your house even if it's not for sale right.

Number three reason is well I could just rent well rents are going up too rents reach insane levels I'm sure you've seen that and the eviction moratorium is just starting to be lifted so the rents are going to go up even more rents in the U.S are rising faster than home prices so if you're thinking well rent would be better the rents are going up faster than home prices.

Plus and we'll do a video about this later in the week so be sure to subscribe we can show you how you can lock in a payment of about a thousand dollars a month for a three-bedroom home and never have to worry about your rent going up ever again so how would that be if you had a three-bedroom home detached house pay about a thousand bucks a month and never have to worry about being evicted rent going up prices changing you're always locked in and maybe having some profit from it.

What's the next reason well even if the home price doesn't go up and the rent doesn't go up everything else is going up gas prices grocery prices there's inflation with everything you've seen it some places um gas is higher they're predicting gas is going to be seven dollars a gallon and when gas is seven dollars a gallon it affects trucking and shipping and all the other prices go up so even if your rent doesn't go up a penny even if you can afford what you're spending now for rent everything else is going to go up so you probably want to look at options to reduce your home cost and prevent it going up in the first place so again a thousand bucks a month for monthly expense for property would be good and they're not talking about just gasoline here um you're talking about groceries insurance all the other things that go along with it.

What about location well according to the Wall Street Journal it doesn't matter where you live because Gen Zers will never work in an office and it doesn't matter because the new workforce is you can work anywhere and companies are starting to create their business model around that they're starting to say well let's put together a good business plan where you can work anywhere because of that you can live anywhere so you don't have to be locked into a market that the house prices are jacked up through the roof because that's where all the big businesses are you can live anywhere and still have a great job.

Last but not least this is what happens if you wait priced out of paradise this is a great story by WPTV in Palm Beach where they had a three-part story interviewing a bunch of people that home ownership is vanishing for many millennials well the reason why is because they're looking for a certain type of house in a certain area the real estate market makes it impossible for the age group millennials to buy a house.

Well if you're looking at the mid-range of a house three four five hundred thousand six hundred thousand not only is going to be hard to find one because that's where everybody's trying to buy but you might not be able to afford it you know five hundred thousand dollar house might be three or four thousand a month with all your fees insurance taxes everything else but that's what everybody wants because those houses look nice they look nice from the outside they're modern and that's what people think that they want.

Above that the prices are too high where there's not as big of a market in the million plus range below that in the 200,000 range there's not a lot of competition because a lot of people who can afford a house and have credit and income and a down payment they think they're too good to buy a 200,000 house so you're not going to run into competition where there's 50 bids on a 200,000 house you can probably buy it maybe even get a little bit of a discount right if you find a fixer-upper.

It's scary when we look at these prices 26 year old Rebecca Lucataro says right um they're this is a good quote the closer to get where everyone is the higher it is well what's the answer go to where everybody isn't eventually they will be there just like we talked about in Spokane it's our that was where everybody isn't at one point but now it jumped up so if you find the next place even if it's not exactly what you want two hundred thousand dollar house eleven hundred dollars a month lock yourself in wait for everybody to move there after you do and then you won't be shut out you won't be infuriated like this person getting priced out and pushed out.

So these are seven reasons why it might be good to just jump on a 200,000 house worst case scenario you have a place to live that's cheap you have a roof over your head you don't have to worry about your landlord jacking up your rent you don't have to worry about your lease not getting renewed you don't have to worry about maybe the market going up even more where you can't afford a house at least you're in a house.

If the market goes up you will benefit from owning a house because the market's going to raise all the prices even if the market goes down you will still be in a good place because the market for the more expensive houses will go down more and in reality how much can a 200,000 house go down can't really go down that much so you're going to be in good shape if you start out with that you just have to get over the fact that it may not be exactly what you think you deserve for property but financially it'll be a great thing and even worst case scenario you have a roof over your head.

So you won't be running into a house that has 14 offers on already 12 of those with cash because you're looking at something that maybe the vast majority of people overlook because their eye is looking for something that's more flashy best of luck with your house hunting look for future videos about how to create that 1,000 a month payment so that you don't get shut out of home ownership as a vanishing dream for your financial future and also for your family's future.