We’re all starting to experience the adversity brought about by the COVID-19 scare. From volatility in the financial markets to having a hard time finding basic supplies in stores and even looking at something as simple as a door handle differently. Seeing, feeling, experiencing adversity is the easy part. It’s also the hardest and least desirable. Adversity always presents an opportunity and that's what this story is about. What can you take advantage of today? Let’s start with real-estate.
At 3.2% for a 30-year fixed-rate mortgage, we’ve never had lower rates. How good are these rates? The historical average is 6.5%. Literally double current rates. Even compared to recent history, it’s huge. Rates are 24% lower than a year ago. What does that mean to you? On the average $350,000 mortgage in South Florida, it’s a savings of $200 per month over a year ago. In other words, if you have a mortgage you should be looking to refinance right now. Even if you took it out less than a year ago. Congrats, you just saved $2,400 per year. If you’re renting and you’re going to remain in South Florida for at least the next three years, you should be looking and doing everything you can to buy. It’s literally cheaper to buy and make a mortgage payment, than to rent and make a rent payment, for every property type in South Florida right now with rates so low.
Vehicles are also a cheaper option. With gas prices low and heading lower, demand will increase for less fuel-efficient vehicles. We’ve seen it every time we’ve had low gas prices for an extended period of time. By the end of next week, gas prices will be the lowest on record adjusted for inflation. If you drive a large/inefficient vehicle and would rather be driving something that isn’t. Start thinking that way. Your trade-in or resale value will be on the rise and you’ll likely be able to get a better deal on an efficient vehicle.
Now for the smaller buys, with the disruption in business as usual for many businesses, you’ll quickly see opportunities arise for great deals on many “durable-goods” or items that aren’t disposable. This means appliances, furniture, and electronics. Now is a time to begin to become opportunistic with many of the more significant purchases you make. Just as there’s volatility in the financial markets creating, longer-term opportunities right now, the same is and will be true in other aspects of life.
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