Finance First Friday: Home Sweet Home

Benji helped our new Bishop and his family find their new home in Minnesota

Buying and selling a home is exciting and can be overwhelming, especially amid a pandemic and economic downturn. Benji Koshy and his husband, Jayan, have been members of St. John’s since May 2018. They live in St. Paul with their beloved dog, Granger. Benji is a REALTOR® and owner of Koshy Real Estate through Keller Williams Integrity Lakes. He is in the top 10 highest producing solo agents in the brokerage. So, he was the first person I turned to for advice.

When is the right time to buy a house? When is the right time to sell a house? Are there programs for first time buyers or low-income buyers? Are we heading into another housing crash? 

These are just a few questions that many people think about late into the night when they’re getting ready to make a move. Except now it’s a little different, isn’t it? Now we must think about how we can safely buy, sell, and invest in real estate while keeping ourselves and the people on the other side of the deal healthy. 

People have a lot of questions, but not always do they have a reliable source to get those questions answered. Google is great if you know what to look for. But there are a lot of unhelpful articles out there to weed through. When looking for guidance, the best place to start is by asking a trusted friend who has recently gone through the process, a realtor, or a mortgage lender. 

I will try to answer a few questions here. 

When is the right time to buy a house?

The right time to buy a house is when you’re ready. There’s no reason to start the process if you don’t feel up to the challenge of maintaining a home. Having a landlord fix the water heater is a lot easier than doing it yourself. And when you are ready to buy a house, it doesn’t really matter what’s going on in the market. Personal circumstances will always outweigh external factors. But when you have flexibility the external factors start to matter more. So, what’s a good time? 

Is now a good time to buy? In August 2020, we are experiencing the lowest interest rates in 60 years. These rates don’t come often, and they typically don’t stick around. Locking in a rate below 4% for 30 years will have the next generation of home buyers salivating over your low mortgage payments. 

There is another side to that coin, though. We are also at a peak in the Twin Cities housing market. Home prices have been on the rise for several years now, making market experts wonder when we will cap out. With the COVID-19 recession, we are seeing the shift begin to take shape. For home buyers, that means the price could drop in the next year or so. Lower home prices could come with higher interest rates, and now they’re cancelling each other out. 

That brings me to the next question: 

When is the right time to sell a house?

Again, the same theory applies. If you need a bigger house to start a family, you’re waiting for kids to graduate high school before selling the home, or you’re ready to downsize, these circumstances will outweigh market conditions. But of course, there’s a caveat. 

Market experts advise that if you’re thinking about selling your home within the next 5 years, sell now. Being that we’re at the top of the market, you aren’t going to see the same home prices that we’re seeing today. If you need to stay in your neighborhood for the school or other reasons, you could rent for a while before reinvesting your money into your next home. That way you’re selling at the peak and buying in the valley. Best of both worlds, right? 

How do we keep everyone safe?

The real estate industry has adapted quickly to Corona-tide. Selling your home does not mean opening your home to hordes of people milling about your house with no regard to the safety of you or your family. Currently, showings are restricted to up to two decision makers and their agent. Before that, there are virtual tours, virtual open houses, and restrictions against viewers who are presenting symptoms. Thankfully, we have the technology so people can make educated decisions on whether they want to buy a house without stepping foot inside. 

As someone who is immunocompromised, I am especially sensitive to finding creative ways for people to see homes. It’s not common for someone to get through the entire process without going inside at least once. Likewise, as Christians, the Great Commandment tells us to love one another as ourselves. We must find ways to conduct business in ways that care for buyers, sellers, and the communities of each party in the transaction. As we are welcoming strangers in, and being welcomed into strangers’ homes, the best we can do is follow the COVID-19 guidelines and protect those around us. 

Are there programs for buyers? 

Yes. There are down payment assistance programs, there are land trusts for low-income buyers, there are financial coaches, there are neighborhood grants. Home ownership is the fastest way to build wealth and many, many organizations are out there that embrace this and it’s their mission to offer help towards this goal. 

My motivation to get into real estate was and continues to be to help low-income and first-time home buyers find joy in homeownership. I have since helped many families get into starter homes. Some are getting ready to move up. The joy and satisfaction of seeing my clients’ dreams come true is more gratifying than I can say. This motivation ties back to my faith and my deep belief in caring for our neighbors. This is one way I can make a tangible difference in my community.

Are we heading into a housing crash? 

When looking back at the 2007/2008 housing meltdown, we see the indicators are completely different. Subprime loans and relaxed lending standards have all but stopped and we are in completely new territory regarding home financing. That doesn’t mean the economy isn’t suffering due to the pandemic. With this recession, we will see home prices dip, but it’s not due to homes being over valued at appraisal, or buyers being approved for loans they can’t afford. 

Buying a home is the largest investment most people will make. It’s the quickest way to build wealth; especially when interest rates are so low. The right time to buy or sell a home is when it makes sense for you and your family, secondary are market conditions, which currently indicate now is a good time for both. Finding the right person to guide you will make the process simple, understandable, and enjoyable. I would be happy to answer any additional questions you may have,

Thank you Benji!

Wherever you are financially, your story and resources will be a gift to other members of the parish. To write a post, share resources, submit an article, or do an interview please contact Sarah Dull, Executive Administrator, contact Executive Administrator, Sarah Dull.

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