#010 – It’s a seller’s market right now. If you planning on buying, selling, or refinancing your home in 2021, don’t miss this episode where Mayra breaks down why the home prices have gone so high and she makes an educated guess on what the market will continue to do in the near future.  


[0:00] It is a seller’s market out there. If you’re interested in selling, buying, or refinancing a home, you do not want to miss this episode.


[0:11] Welcome to Debt Free Latina, the podcast where you can finally realize your dream of being debt free and feeling peace about your financial future. And now your host, Mayra Alejandra Garcia.


[0:29] Hola, hola, you are in the right place. We are going to be talking about real estate. Right now, it’s a crazy seller’s market. What does that mean? That means that if you are the seller of a home, you are making top dollar and the ball is in your court. So, you can get top dollar, and more. So for example, just a few years back, maybe what, I bought my home about 6 years ago, I was able to negotiate with the seller to pay some of my closing costs. That is no longer an option. If you want to buy a house right now, you have to have the down, the closing costs, and everything else that you need to close a house. Why do we have this scenario? Well, there are a couple things. One is, if you’re in Phoenix, or you’re in a hot market like Austin, or there’s a couple, Florida… We already had a lot of people migrating to our area. So we already had a huge demand, before any of this COVID stuff happened. And so we already had a lot of people interested. It drove our area to go higher, faster.


[2:04] So for example, we had COVID hit, and that didn’t stop people from buying homes, but what happened was that a lot of the supply chain stopped. So for example, I live in a new area where there is a lot of new development, new homes. And when COVID hit, a lot of the things stopped. So for example, the supply chain kind of just pauses for 6-9 months. All the factories closed, there’s no lumber or components for these new homes. And so, that created a shortage of new construction, and therefore, the olderer builds, the houses that were already previously owned, ended up going up. And so that all kind of dried up. Right now in my area, I had a realtor pull up, we only had eight houses in our local Laveen area. And this was one day in the month of early May 2021. That is crazy, to only have eight houses for sale in this area is unheard of. We have never seen this. Now, is it… I also had a realtor tell me that if they don’t get in, if a buyer does not get to see the house on the first day that it is put on the market, their chances of their offer being accepted is slim to none. So, it is beyond crazy. Cash offers are getting in and who has cash? I mean, unless you’re an investor, most families looking for homes don’t have cash. So, it is a little nutty out there. 


[4:13] Two, the second thing I want to talk about is interest rates. Interest rates right now are low. They are low compared to what they were a few decades before, just a few years before. So it’s really important, if you’re considering refinancing, this is the time to do it. If you are paying more than 4 or 5, 6%, on the interest rate of your home, you need to refinance. Right now it’s roughly about 3%. Make your calculations, of course, this is all based on how much you owe. Run some numbers, because you do have fees when you refi, so you need to make sure it is worth it for you. 


[4:59] What about if you sell and wait for the market to crash, like it did in 2008? I had somebody ask me that. I don’t think that’s going to happen. And I’ll tell you a couple of reasons why. One, we had a lot of people from California moving over here to Phoenix, to Austin, to Florida, to Nashville. There are a lot of people moving out of New York as well. And that is not going to let the prices go down. The prices might slow down, they might not increase so much so fast, but I don’t think it’s going to drop and crash. I don’t see it completely crashing like it did in 2008. So, that’s just my assumption, I mean, that’s just my opinion. But another thing that I am seeing is that this is all about supply and demand. So the demand here in Phoenix is so high. Even when things calm down, in most of the country, they might not calm down here in Phoenix. They might not calm down in those areas that were already in high demand prior to COVID, and prior to this supply chain issue happening.


[6:22] How do you know you’re ready to buy a house? The ideal scenario is to have a 20% down, get a 15 year loan, and have your mortgage payment be no more than a fourth of your take home pay. If you need help calculating that, here’s an example. If you have a $300,000 home. That means you need $60,000 down. Now, if you make, let’s say, $6,000 a month, take home, your mortgage should not be more than $1500. So that is an ideal scenario. You give your $60,000 down and your payment is $1500 or 15 years.


[7:09] Why 15? I’ve had people ask me, but I want to do 30. Well, you could do 30. And remember, personal finance is personal, but you’re going to be in a better place if you get a 15 year loan, because 15 years are going to go by so fast. 30 years takes a little longer. And you could be building wealth by investing the difference. And your interest rate is also higher with a 30 year loan. You get a better deal and your interest rate at 15 years. If you are ready to buy a house, even in this crazy market, I’d do it. Go for it, because prices are going to continue to rise. They might not get super crazy, once we can catch up on this supply chain that’s a bit behind. As soon as we’re able to catch up, the prices will slow down, but they will not go down. So the best time to buy a house is now, if you’re ready. If you’re not ready, then you need to wait. You need to be patient, you need to beef up your emergency fund, beef up your savings, and give a good down, and put yourself in a really good position.


[8:37]Thanks for listening to Debt Free Latina. Make sure you hit that subscribe button so you can take Mayra with you on your journey to become debt free as you build financial wealth. Looking for more? Follow Mayra on Instagram @debtfree.latina, on Facebook @debtfreelatina, and online at debtfreelatina.com.