Why You Should NOT Buy A Home In 2022
Published: 2022-05-16
Status:
Available
|
Analyzed
Published: 2022-05-16
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Housing affordability is at historic lows, leading to sellers lowering prices.
"housing affordability is nearing the worst it's ever been in history. And as a result, sellers are beginning to lower their asking prices."
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Mortgage demand is decreasing, and interest rates are at their highest since 2009.
"mortgage demand begins to slip and interest rates reach the highest point since 2009."
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It is advised not to buy a home in 2022 unless prepared for potential issues, as two-thirds of homeowners regret their purchase.
"Should you or should you not buy a home in 2022? And today, I'll confidently take the stance that no, you should probably not buy a home unless you're prepared to handle these six situations that I'm about to outline because you definitely don't want to be one of the twothirds of homeowners who now regret their purchase."
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40% of rushed home buyers were overwhelmed by property maintenance needs.
"40% were overwhelmed by the amount of maintenance the property required."
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32% of rushed home buyers found their home to be too small or lacking essential features.
"32% said that the home turned out to be too small or lacked important features."
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39% of rushed home buyers experienced increased commute times due to location, and 25% bought in undesirable areas.
"39% said that the location increased their commute time and 25% bought in a bad area"
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28% of rushed home buyers found their mortgage payments to be excessively high.
"28% said that their mortgage payment was too high."
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24% of rushed home buyers were concerned their purchase was a poor investment and overpriced.
"24% worried that their home was a bad investment and was too expensive."
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The majority of adults who regret buying a home failed to conduct proper financial calculations beforehand.
"I would go on a limb to say that almost everybody who regrets their home purchase, which turns out to be roughly 2/3 of adults, didn't do the math ahead of time to make sure that buying a home was really in their best interest."
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The assumption of continued 10-20% annual home value appreciation may be flawed, making renting seem less financially detrimental.
"home values will continue to increase at the recent pace of 10 to 20% a year. This kind of math just makes it seem like renting is throwing money away every single month."
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Property taxes typically range from 0.4% to 2% of the home's assessed value annually.
"property taxes... usually ranges anywhere from point4% all the way up to 2% of the home's assessed value every single year."
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Basic homeowner's insurance generally costs between $100 and $250 per month.
"insurance... generally it's going to range anywhere from a hundred to $250 a month for basic coverage"
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The total monthly cost of homeownership, including taxes, insurance, and repairs, can quickly reach $2,500.
"you could very quickly be approaching $2,500 when you account for property taxes, insurance, repairs, and everything else."
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The combined transaction costs of buying and selling a home can amount to 4-7% of the property's value.
"the transaction cost of buying and selling a house. ... this could often be a very expensive process that could cost you anywhere between 4 to 7% of the home's value right off the bat."
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The cost of selling a home typically ranges from 4% to 6% of its value.
"selling a home could easily cost you another 4 to 6% of the home's value from start to finish."
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To break even on a home purchase, one must sell it for at least 7% more than the purchase price.
"just to break even on the purchase, you're going to have to sell your home 7% higher than what you paid for it."
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Future home appreciation is not guaranteed, and the market could weaken despite current low inventory and high demand.
"the future of home appreciation is not guaranteed. And even though things look good with low inventory and strong demand, there is a chance that the market could soften."
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It is recommended to plan on keeping a home for at least 5 to 7 years.
"you shouldn't be buying a home unless you plan to keep it at least 5 to 7 years."
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Over three years, the total overhead for a $400,000 home can reach $47,400, including closing costs, annual taxes/insurance/repairs, and selling expenses.
"over three years, you could very well expect to pay a $4,000 closing cost when buying, $7,800 a year in property taxes, insurance, and repairs, and a $20,000 expense when selling. That's $47,400 worth of overhead."
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The break-even point for most homeowners is estimated to be between 5 and 7 years.
"the break even point for most homeowners is probably going to be somewhere between 5 and 7 years."
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The rapid price increases in the housing market over the past two years are an anomaly and are unlikely to continue at the same pace.
"these last two years have been a complete anomaly when it comes to the housing market and it would be impossible for prices to keep rising at the same trajectory. It's just not going to happen."
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Homebuyers should maintain a cash reserve of 3 to 6 months of home expenses.
"you shouldn't buy a home if you don't have at least 3 to 6 months of your home's expenses saved up in cash at all times."
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Average lifespans for common home components: roofs (15-25 years), water heaters (10-15 years), AC units (10-15 years).
"Roofs usually last 15 to 25 years. Water heaters last 10 to 15 years. AC units last 10 to 15 years."
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The costs of materials, labor, and time for home repairs have significantly increased in the last two years.
"the cost of materials, labor, and weight times have increased substantially throughout the last 2 years."
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The current market offers opportunities for buyers to negotiate and gain leverage, potentially leading to good deals.
"now could finally be the time where you can negotiate and look out for new opportunities that haven't existed since co. For the first time in a long time, buyers could begin to get the upper hand, and that could present some great deals if you know where to look."
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A real estate project in Phoenix, Arizona is expected to experience consistent and stable long-term growth.
"a project in Phoenix, Arizona that I believe long-term should see some fairly consistent and stable growth."
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Real estate has been the speaker's best, but also most challenging and time-consuming, investment.
"For me, real estate has easily been the best investment that I have ever made, but it's also been the most challenging and the most time intensive."
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