In my 15 years of mortgage lending, I’ve seen Northern Arizona homeowners utilize their equity in a variety of life-changing ways.
Stability, comfort, privacy, security, community and personal expression are some of the top non-financial reasons for home ownership. While these are certainly all very compelling and vary in priority from each homeowner, the “eighth wonder of the world,” as Einstein called it, has massive impact to all homeowners as home appreciation is compounding interest. Yes, markets move in cycles, and we can get caught up in the minor movements of the moment, but with a big picture mindset, the value of home appreciation to a homeowner’s net worth is staggering.
Where it Has Been, Where it is Going
Arizona finds itself in the “Mountain Region” (see chart) and has experienced some of the highest real estate appreciation in the country, well above the national average. Median Home Price in Arizona in 1990 was approximately $79,700. Median Home Price in Arizona wrapping up in 2023 was $429,900, with Flagstaff, of course, outpacing that with a median price of $588,000. My objective isn’t to dissect the affordability differences of 30 years ago vs. now, but rather to stand in awe of the hundreds of thousands of dollars with significant financial impact to those homeowners. In my 15 years of mortgage lending, I’ve seen Northern Arizona homeowners utilize their equity in a variety of life-changing ways.
Here’s a brief list of some of these different uses of equity I’ve seen over the years:
- Home expansion and improvement
- Using for business startup
- Supplementing retirement income
- Using toward family education
- Using to help family purchase their own homes
- Passing on as inheritance as generational wealth with special tax protections
Homeownership can be a family/community affair with the value of that equity permeating far past the individual homeowner. We don’t have a crystal ball of future appreciation, but we do know that Arizona has maintained its status as a Top 10 population-growth state for close to the last decade and best guesses don’t have that changing anytime soon. Based on national appreciation, forecasts modeling a slightly lower than Arizona average sales price, the net worth impact and compounding appreciation of homeownership over the next five years appears extremely bright.
Thus, the impact of Einstein’s eighth wonder of the world will undoubtedly continue to positively impact generations of future Northern Arizona homeowners. FBN
By Chris Hallows
For additional information or to schedule an appointment, visit ChrisHallows.Benchmark.us or call 928-707-8572. The Flagstaff location is 824 W Rte 66 Suite A-3.
Chris Hallows is the branch manager and senior mortgage advisor of Benchmark Mortgage Flagstaff.
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