We hope this finds you refreshed by the long Easter weekend. While it is so easy to get tangled in the day to day problems, I love slowing down to remember and celebrate the single most important event in human history. He rose up from the grave for ALL of us, both sinners and saints alike and for that I am so so thankful.
How hard is it to buy a home right now? Really, really hard in many parts of the country. The reason, there are not enough houses for sale, resulting in more buyers than available homes. A shortage of inventory has led to bidding wars and a quick increase in the contract prices for the homes that are sold. Three different successful realtor clients of mine, in three different geographic areas, have all shared the same story with me that goes as follows; If I had more houses to sell, I could make more money because I’ve got buyers, some prepared to even pay cash, but finding them homes to purchase is a real challenge. This recent ARTICLE, courtesy of The Ascent, highlights this supply and demand disconnect. I’ve got clients on both sides of the coin, those hoping to buy and scratching their heads if now is a good time and those that are considering selling while the market is so strong. These types of decisions are very personal and all sorts of considerations come into play, such as interest rates, school systems and what to buy if you are selling, etc. Weighing in on some of the financial elements when clients ask is one thing, but all the other angles that go into the decision gives me a real appreciation for a full-service realtor that will roll their sleeves up to assist their clients. One big question many have – are we in the middle of a housing price bubble? While it is hard to say yes or no, the pace at which housing prices have increased over the last 24 – 36 months, does not seem sustainable long-term. My advice is to not get caught up in the bidding war and end up over-extending yourself for a home that may or may not continue to go up in value as quickly as it has recently. Know your budget and stick to it. That may result in you buying less square footage or a house that needs some TLC, but those are better results than ending up over-extended financially.
As you can read in the second paragraph of the WMR, the bond market is pretty convinced we are experiencing inflation in areas in addition to housing. My personal thought is that inflation is inevitable when you consider all the money we have printed and all the stimulus that has been provided. The first paragraph of the WMR highlights proposed additional government spending that will only underscore the potential for higher inflation. The solution to fighting long-term inflation is to invest. Allowing your money to increase at a rate equal to or better than inflation will keep your purchasing power equal or growing over time. When banks and money markets are paying nothing you should consider investing into something. Our team has developed an entire suite of investments and products that give investors a fighting chance against inflation while protecting against losses.
As always, we hope your find the Weekly Market Review both informative and interesting. Have a nice week.
Trevor N. Coe, CFP®