4 Good Reasons, Why Not to Fear the Market

What is going on in the market?

Is the bubble bursting?

We’ve all seen the headlines and that’s why we want to give you 4 good reasons why not to fear the market.

  1. Most homeowners have tremendous equity in their homes. During the crash, there were many homeowners in a negative equity situation. Whereas today, what we see is many home owners have at least 50% equity in their homes.
  2. The lending standard is much tougher. At the height of 2008, you only needed a pulse to receive a loan. By the way, that was called a heartbeat loan. If you have a heartbeat, YOU GET A LOAN! Not so anymore, lending rules have been tightened down in large part to help ensure those who get loans can readily pay them back and avoid foreclosure.
  3. Homes Sold in December 2018 were priced higher than homes sold in January of 2018.
  4. The financial markets are not doing well, but the real estate market is. There’s job growth as well as historically low unemployment rates. High tech companies such as Google, Apple and Facebook are expanding, not just in the Bay Area, but across the nation.

According to Ray Dalio, the American billionaire investor and hedge fund manager, he’s expecting the real estate market to outperform the financial market, which is what we’re seeing right now. In recent remarks, his advice was that cycle comes and goes, so it’s important for not only investors, but everyone to take advantage of the peak and the valley. Do the opposite of what most people do, which means you should sell at the bull and buy at the bust. We are not at the peak nor the valley right now. As a seller, if you need to sell, do it before the valley. As a buyer, do the opposite of most people. Most people are sitting on the sidelines, so it’s a great time to get into your first home or purchase an investment home, because California is rapidly on its way to becoming a renter’s state.”

As you make your plans for 2019, we can help you dig deep into the economic facts to help you make the best decisions for you and your family. Message us today, to take a look at the real data and educate yourself on the future of Silicon Valley Real Estate.

Your South Bay Real Estate Agent,

Thuy Tran

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