This Year's Biggest Real Estate Opportunity For Home Owners

Where is today's big real estate opportunity??It’s right here. It is in your home equity!?

Welcome back to another real estate market update!?I’m Erik Braceland with Braceland Homes here in sunny San Diego, California, where we guarantee the sale and/or purchase of your home.??

Today I’m going to break down the current situation with home equity, kind of wrapping up this past year. I'll show you the latest, very impressive, numbers we have from this past year.??

I really think this is the current real estate opportunity. It may be driving a lot of you prospective home buyers. "Do we harness that home equity and move up? Maybe if we’re retiring, we downsize, and use all that accumulated home equity and home sale profit to build a little bit of a nest egg." A number of different things that people are doing with home equity right now.?It definitely there in abundance. And a lot of you are thinking, and actively considering using that home equity to do something different with your housing situation.?Let us know what you're thinking of doing in the comments below!

So how to calculate home equity??It’s a pretty simple equation once you have two main data points.?Do you know how much you owe on your home? Do you know how much your home is worth??Those two bits of information give you the equity.?You just subtract what you owe from what your home is worth.?And yes, I'm available to help you with the second piece.?Just contact me at 619-947-3560.?You can get a ball park idea of what your home can sell for online.?But I can give you a much more accurate value by taking a look at your home in person, and accounting for the home's current condition, as well as all you've done...or haven’t done, to your home.?Anyway, that's how you find equity on a house.

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CoreLogic’s third quarter home equity report showed that the average homeowner with a mortgage gained $57,000 in equity across the nation. Boom.?We could wrap up right here.?What an awesome gain!??$57,000 as of the third quarter 2021 for home equity. Those are the latest numbers we have. The average growth in equity in a home.?But don't leave just yet.?I have more for you.?There’s so many of you that tune in from many different parts of the country to our weekly housing market updates, and I know you're wondering, "what about where I'm at?". Fifty-seven thousand is the average, so let's call that somewhere other than on the coast.?Here on the West Coast or here in the San Diego housing market it’s more in the neighborhood of twice that much. If you’re in the middle of the country maybe it’s that fifty-seven thousand. Maybe it’s a little bit more, depending on where you are.?But $57,000 last year. That’s a shocking number to many of us, right??Perhaps we need to put that to work for us somehow.?31.1% is the year over year percentage for increase in equity in the U.S., for homes with mortgages.?$3.2 trillion is the rise in equity. They go on to say "this summer, home price growth reached its highest level in more than 45 years, pushing equity gains to another record high". So, equity, is clearly the shining star of the pandemic. You know, the story continues on. We talked about the pandemic in 2020, how home equity was keeping people out of trouble because they could tap into that equity and use it as a financial resource.?That's a difference in the housing market between then and now, and something most people didn’t have access to during the housing crisis for example. If folks had more equity in their homes the housing crisis probably wouldn't have been such a crisis.

You know, if we look across the country, this $56,700 in average gain, you see it, depending on the state you’re in. Of course, we talked about it being high here in California. It’s $119,000. Think about that. You know, somewhere in the middle of the country, $22-24,000 in gain in the price of a home. That's the minimum as you can see.?Oh sorry, North Dakota only clocked in at fifteen thousand.?So, what's the average price of a home there??Two hundred thousand??Maybe.?They still got a seven and a half percent return.?Still a good, good thing for all you homeowners out there everywhere.?Awesome really.?Congrats!?A report came out a couple of months ago saying "in every major city", listen to this. "In Every major city, it was cheaper to buy a home than to rent, when you consider the equity growth right now." Every major city.?

Unfortunately, not a lot of great news out there for you first time home buyers.?Rents have been skyrocketing.?Certainly, home equity, is the benefit of owning a home, that many, many people enjoy.?So, if you are one of those frustrated buyers, stay focused.?Home equity is the brass ring, or reward, at the end of your quest.?Not sure if that is a great analogy, but when I was a little kid we used to ride this merry go round at the beach.?On this particular merry go round, they had this kind of ring dispenser.?As you rode by on your horse, you could reach out and pull a ring from this dispenser on the last revolution of the ride.?If you got lucky and pulled the brass colored ring, you could exchange it for a free ride.?Quite satisfying, but It was a simpler time for sure.?Anyhow, the point being, keep your eyes on the prize.?Eyes on the prize.

CoreLogic's CEO said, “Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distress sale, but they have also enabled many to continue building wealth." That’s what we were just talking about, the ability to build wealth through equity is one of the greatest benefits of home ownership. We know there’s a ton of non-financial benefits of home ownership.?

I've talked about those extensively, and recently posted this video about those "Amazing Non-Financial Benefits of Homeownership". The concept of home has definitely grown in many people’s hearts and minds as we’ve gone through the pandemic. But the financial benefit of building wealth is a huge, huge opportunity in home ownership.

She goes on to say "U.S. households own $36.8 trillion in owner occupied real estate, $11.5 trillion in debt, and the remaining $25 trillion in equity. In inflation-adjusted terms, homeowners had an average of $294,000 in equity in quarter three of 2021 - a historic high." It’s unreal! The story on equity right now across the country in real estate is unreal. The average homeowner has?$294,000 in equity.?

This really is a great opportunity for all of you that have this benefit to tap into.?So many opportunities here with your home equity.?You could sell your home for record high profit, leveraging the current housing inventory crisis, and extreme seller's market that we current find ourselves in. That upper hand, if you will, paired with your amazing gain in home equity over the last couple of years, could put you in the perfect position to find, and purchase that exquisite dream home you've always desired.?Or perhaps you've already been fortunate enough to secure your castle, but now the kids are grown or you've had your fill of parties and entertaining.?Maybe at this point in your life you want something simpler, smaller, less square footage and yard to clean and maintain.?I hear that.?Instead of cashing in all that profit and home equity to buy something larger, you could find a smaller space to fit your needs, and then invest or save all that money for whatever comes next.?Still loving where you live??Perhaps you are interested in cashing in some of that equity for some home improvement to make the home you love even better.?What will you do with your home equity??Share with us in the comments below.