So what does the future hold for you?
As I gaze deep into the Data, I see that we are coming to a crest of this upswing real estate cycle that has lasted nearly 7 years now. That much is a given by almost anyone who spends anytime at all watching the wind blow, whether from the shoreline or in the midst of the sea (as I am). The mystery lays in the timing of the next downturn, this is the question that everyone seeks the answer to, but THIS IS THE WRONG QUESTION!
The right question is;
“Given my unique circumstances, the resources I currently have and my past experiences, what is the wise thing for me to do now?”
…..regardless of the exact timing of the pending cycle downturn!
If you are happy in the home you currently live in and can afford that home even if the income was to recede in a recession by 10 to 20% then I would stay put.
If your finances are tight or if you plan to move in the next 1 to 3 years then I would consider scheduling some time to consider your options in the very near future.
If you own rental properties that are producing income free and clear of expenses of greater than 6% then I would continue to hold them as long as they do not represent a threat to your balance sheet in the event of a moderate correction. Lowering leveraged positions would be similar to battening down the hatches prior to entering rough waters.
If you have been fortunate enough to own multiple income producing properties then this would be an excellent time top grade your portfolio by selling off the less desirable properties and wither paying down debt or upgrading from single family to multifamily units for more diversification and more reliable cash flow. A portfolio review would be the wise thing for you to do in this season.
In most cases if you do not own a personal residence and plan on staying in the same area for more than 3 years (in California at least) it will make sense for you to purchase a home. However it would be wiser to learn your limits in advance and perhaps to purchase less home then you can actually afford.
I would love to know your thoughts and hear your predictions for the future in Real Estate. Pay us a visit and leave your comments on The Mathis Team Facebook page!