I’ve been planning this post for a few weeks, and then the Bubble Blog had their own post about the current buyer’s market. I had a long-winded, detailed analytical post outlined for today’s post, and even had it about half-way written. Until I met this guy last night, let’s call him Mike. As things typically go, we circled around to talking about the real estate market, and how he and his family had recently moved here from another part of the country. Wife went to undergrad at UVA, had the aspirational vision of returning to bucolic Charlottesville one day … now that they’re all grown up, they’re back.
They bought a nice house and are in the midst of renovating it. But they can’t help watching the market and seeing how it continues to shift. They paid a sizable amount of money for their house, and are spending more to renovate it, and are watching the market shift …
But in the grand scheme of things, it doesn’t matter. They bought the house to live in, to raise their children, to make memories. They didn’t invest in an ATM; they’re not getting a HELOC to finance their burgeoning real estate investment club, and I suspect they won’t be pulling money out of the house to buy a new car to keep up with the Jones.
They bought a home, a concept that has been both forgotten and denigrated because the word “home” has been bastardized by those seeking to sell, sell, sell. If you’re looking to buy a home – somewhere to live, somewhere to come home to at night and wake up in the morning, raise your kids, have dinner parties, watch TV … you may want to consider buying right now.
I’m not advocating simply buying anything and paying any price – but don’t be afraid to look.
Prices are declining. Interest rates are ridiculously low. A lot of sellers are motivated (although there’s no efficient way to determine if they’re setting the prices based on what they want to make or what they need to make or what the market says they might make). All I can do as a Buyer’s Agent is advise my clients as to the current state of the market, what the comps (more active and under contract than sold) indicate is a fair price, and manage and guide them through the transaction.
Absolutely consider the financial implications of your decision, but don’t be driven solely by those considerations. One of the greatest challenges of my job is managing my clients’ expectations and emotions. And I’m saying this – do not let fear and emotions control your decision-making process. Buying a home is an emotional venture – being able to paint the walls whatever color you like, putting down new flooring, fixing the HVAC or the water heater … mowing the grass …
Manage your fears and emotions. Buying in this market may feel like trying to catch a falling knife, but if you can catch it by the handle, enjoy it.
If you have cash for a downpayment, a stable job, and are intending to stay put for four to seven years, consider buying now.