Local Market Update


Tubac truly is a village like no other. With three major cultures—Spanish, Mexican, and Native American—lending their ethnic influences to the town’s evolution, Tubac has adopted a distinctive eclectic cultural flavor all its own.

If you’re into the outdoors, Tubac does not disappoint. Golfers enjoy year-round golfing, with several challenging courses to choose from, all within minutes of Tubac. The scenic mountains and rustic dirt roads around Tubac offer hikers, bikers, and nature-lovers numerous trails on which to experience the desert and all of its natural wonders up close. Birding enthusiasts will enjoy bird-watching right in their own backyards.

A short drive takes you to beautiful Patagonia Lake where visitors will find a boating marina, full RV hookups, hiking trails sure to please both beginner and experienced hikers.

Celebrated as an artist’s community, Tubac is home to painters, potters, sculptors, and carvers who produce works in every medium imaginable. An entire day can be spent strolling through the streets of Tubac visiting art galleries, working studios, boutiques, and gift shops. Tubac was also recently named the #1 BEST SMALL TOWN ARTS SCENE by USA Today!

If you are thinking about buying a home in Tubac, you won’t be disappointed. Check out the latest Market Update. Grab your copy here!

Gaining Financial Freedom Through Homeownership

Tubacproperty.com

Tubacproperty.com

Purchasing your first home can work for you in many more ways than one. A home purchase is not simply a roof over your head and cozy walls around you (though that definitely helps) – it’s a path to financial freedom.

It’s a well-known fact that homeownership can play a very important role in your financial stability. Solid financial stability means that you have more freedom in pursuing your life goals.

This is great, but how can you make your home purchase work for you?

More Capital Through Forced Savings

The term “forced savings” can sound a bit negative, but it’s actually a very positive thing, especially in homeownership. As you make mortgage payments, you pay down your principal and interest. Therefore the amount you owe relative to your home’s value builds equity, thus increasing your net worth.

Forced savings occurs because, in order to keep your property, you must make mortgage payments. As the balance for principal and interest decreases with each payment, this can be considered savings.

In other words, forced savings through mortgage payments create a “cushion” so to speak, which brings you closer to your financial goals, and to your financial freedom.

Freedom Through Property Value

Typically, all properties appreciate in value. While there’s no guarantee that the value of your home will appreciate over time due to housing market fluctuations and the state of the economy, the majority of homeowners do experience an increase in the value of their home over time. 

According to the Federal Housing Finance Agency’s House Price Index for Arizona, the appreciation on homes is tagged at 14.1% (on average) per year, since 1991.

With each mortgage payment, you also decrease the amount you owe on your loan. As the value of your home appreciates, the difference between your home value and the amount you owe results in more equity, increasing your net worth.

Fixed Housing Costs

Having a fixed, stable housing payment can help to keep more of your hard-earned money in your pocket. Renting property is subject to fluctuating rental prices, and of course, no equity can be built through making rent payments.

In contrast, mortgages can be fixed, which protects you from fluctuating housing costs. With fixed living expenses, you can keep your cost of living down and plan for savings more accordingly. 

You may even decide to put extra capital towards investments or other avenues that help you build more financial freedom.

Homeownership Creates a Tax Shelter

When earning a profit from investments, even if the profit was made through property investments, a capital gains tax must be paid by law. However, the profit you make from selling your home can’t be taxed this way (though there are some limitations). This keeps more money in your savings account, as less is being put towards taxes.

There are also many other tax benefits that come with being a homeowner, such as tax deductions for mortgage interest and property taxes. Therefore, owning a home can reduce your taxable income and help you to save more money in the long run.*

Homeowners Have a Greater Net Worth

According to a recent article by Forbes, the net worth of homeowners is 40 times greater than it is for renters, despite the pandemic. This data is based on the Federal Reserve’s 2020 Survey of Consumer Finances. 

In the survey, it was found that homeowners had a median net worth of $255,000, while renters had a median net worth of $6,300 in 2019. 

Peace of Mind

It may be easy to disregard the importance of mindset on financial freedom. However, you must make responsible financial decisions to own a home – such as making your mortgage payments on time, planning and saving for a down payment on a new home, or even planning how to make improvements to your home in order to increase equity and value. 

This mindset can have a positive impact on other financial decisions as well. Saving, spending, and investing can all be positively affected through homeownership and can encourage better habits when it comes to managing your money for increased financial freedom. 

Owning your own home is a no-brainer when it comes to building a solid financial future. The freedoms and responsibilities of homeownership can have lasting effects, for years to come. 

Buying a home is one of the smartest things you can do to help you build wealth for the long term, and it surely helps to secure your financial future.

*Harrison Real Estate Group is not a tax advisory firm. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions, and regulations.

2021 Real Estate Market: What You Can Expect

2021 Real Estate MarketPre-pandemic, the housing market was another playing field. Experts predicted mortgage rates would increase in 2020, there would be a tight inventory for first-time buyers, and a flat home price growth. Then, just two months into the year, everything seemed to come to a ceasing halt. 

Housing rates hit new lows, causing the market to hit an all-time high. The housing market saw higher prices in nearly every region. As the world adapted to its new reality, many homeowners chose to refinance instead of sell. 

In the meantime, housing experts figured out how to predict the unpredictable. Here’s the thing – the market didn’t just adapt to the new state of the world – it thrived in it. Experts considered everything – from the state of the COVID-19 vaccine to the current lockdown orders – when calculating a prediction for the 2021 market. So, whether you’re looking to buy or sell a home in 2021, we’ll let you in on exactly what you can expect. 

Values (and Prices) Continue Rising 

There’s no indication that the price growth will be slowing any time soon. Research by Zillow Economic shows that the sales price for new houses sold in January 2021 was up 5.3% from January 2020. They predict that home value growth could rise as high as 13.5% by mid-2021. By the end of the year, they may be up 10.5% from their current levels. Not only has the supply of new housing reached a high since the start of the pandemic, but we are in need of new homeowners to meet it. 

To put this in perspective, here are some key stats from the market: 

  • National inventory declined by 39.6% over the last year and fell below 700,000 for the first time in their records. 
  • The inventory of newly listed properties declined by 0.8% nationally and grew by 7.6% for large metros over the past year.
  • The December national median listing price was $340,000 – up 13.4% compared to last year. Large metros saw an average price gain of 8.8% compared to last year. 
  • On a national level, the typical home spent 66 days on the market in December, 13 days less than the same time last year. 

Clearly, we can expect slower economic growth next September, which will start to affect home prices. This will result in lower asking prices. There is a possibility that we might see a wave of foreclosures by mid-year, but only time will tell. 

Whether you plan to buy or sell, research points to the first half of the year as the best time to do it. Buyers do have a little more leeway, as they could have more options and less competition later on.

Construction Needs to be Considered 

 

Construction is another point to consider. At the start of the pandemic, all construction came to a halt. Now workers are playing catch up, and depending on the state of COVID-19 regulations, we can expect an increase in construction projects ahead. Housing began to pick up in October 2020, indicating that construction won’t be far behind it. 

Most construction seems to fall into two categories: Luxury and 55+ developments. What does that mean for you? If you plan to sell this year and your home is on the higher-end or in an area with 55+, the new construction could mean competition. Do some research into your area – are there any new construction projects that might impact your sale? Are there big commercial projects in the works? Commercial projects could make your property more attractive to buyers. 

Remote Work Might Be Here to Stay 

Working from home has been a staple of the pandemic for many families. While some businesses plan to return to the office in the future, others are finding that a virtual workspace is more beneficial in terms of finances and productivity. 

If your home is located in a business district, near office buildings, or downtown, this might mean a tougher sell. Homes in those areas were once attractive to buyers because of their proximity to the workplace. Work from home could lessen the demand in those areas. On the other hand, homes located near parks or recreation areas might see an increase in demand.

We might also see a rise in rural areas, due to their beauty, solidarity, and outdoor recreation options. After all, work from home does mean that people no longer have to live near a city in order to do their job. 

What’s Next?

The world’s new normal is a remote workforce, which means staging might look a bit different now. Where sellers used to stage guest rooms, they might show off office spaces. Features like smart home technologies and open and bright spaces are more sought out than guest rooms, entertainment rooms, and dining rooms. 

We must also consider that those who work from home are looking for new ways to spend their free time – particularly outside. This means that homes with large yards will be especially appealing. When staging the outdoor space, it will be important to make the area as attractive as possible. Fireplaces, outdoor kitchens, patio furniture, hammocks, outdoor media, and even pools are all ways to make that space magnetic to potential buyers. 

While we can’t predict where a remote worker might choose to relocate, we can foresee the trends. Highly populated vacation areas might become “home” to remote workers, for instance. If you live in a wonderful school district with reasonable housing, away from business districts, you can expect some new neighbors. Whether you’re selling or buying, look for resources for those moving in or out of the area. 

The pandemic has certainly affected market prices and changed the way people want to live, so this will be a fascinating year to watch unfold. As a buyer or a seller, it’s essential to be as informed as possible about what’s to come. 

To learn more from our housing experts, and to stay up to date on the latest market trends, be sure to “like” our Facebook page. That way, you’ll be in the know for all things housing-related.