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Although it seems like it was just a short time ago, it has been 11 years since the 2007 housing crisis. We learned a lot from that time, which is why today we will be talking about these lessons.
First and foremost, we’ve learned that you should never buy a house that you cannot afford. Many people got in trouble back in 2007 by making this mistake. If a lender tells you that you qualify for a loan, but the payment looks like it will be too much for you, the reality is it probably is too much.
The next lesson to take away from the 2007 housing crisis is to not buy a home with little to no down payment. In 2007 and even before, people were purchasing a home without ever submitting a down payment, and although you can still submit a small down payment today, you should be careful about doing so. If you can afford to put more down, it can help protect you from whatever changes in the market may occur. Plus, you will not have to pay PMI, which can save you money each month.
Prior to the downturn in 2007, many people believed that you could buy a house and it would go up in value, however, this is untrue. Real estate is cyclical. In California, there is a 10-year cycle, on average. What we really learned from 2007 is that you have to be careful when you buy and sell real estate.
Statistically, now is a great time to buy a house because of where we are at in the real estate cycle.
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Many people ask us when the best time to buy a house actually is and, truthfully, the answer is 20 years ago. We know that this isn't possible, but now is also still a great time to purchase a home because of where we are at in the real estate cycle.
If you want to know how much your home is worth for sale now before the cycle ends, please feel free to call and we can look at your home with you to evaluate its value. We look forward to speaking with you.
