This year we’ve seen several major trends rock the real estate market here in Portland, and for the next week we’ll be looking back at the big real estate trends and concepts that have made 2011 a great year for the McDonald Group Portland Real Estate experts. Next up, the trend of homebuyers thinking of their real estate investments in the long term.
During the housing boom, homebuyers often thought of homes as easy-access credit for borrowing money and racking up debt (which has played a large part in the financial and real estate problems of the past few years). Now, homebuyers think of homes as more than just an investment–unless they are buying homes to improve and “flip” at a profit (virtually nonexistent in today’s market), homebuyers want a long-term, secure place to shelter their families, which means more people are staying put in their homes for longer.
By the numbers, most first time homebuyers in 2011 were looking for a home that they will own for at least a decade, and repeat buyers want homes that they’ll own for at least 15 years (according to the National Association of REALTORS® Profile of Home Buyers and Sellers). This means homeowners are learning the value of long-term homeownership, namely that home ownership encourages stability and the longer your own, the better your investment. Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent.
In other words, despite swings in the housing market, most long-term owners see excellent gains in the value of their property. How did people make that investment this year? Among first-time homebuyers, 74 percent used savings, 27 percent received a gift from a friend or relative, typically from their parents, and 9 percent received a loan from a relative or friend. Eight percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-five percent chose a fixed-rate mortgage.
Yes, buying a home is a great investment, but as with all investments, it pays to have an expert on your team. Call the McDonald Group Portland real estate experts today to find out how to turn your home-owning dreams into a long-term investment that will certainly pay off down the road.
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