Investing

Should You Hold Off Buying A Home?

Everyone knows, the housing market has been on the rise in the last few years. In fact, we are now at a higher median price than what we were at prior to the 2008 crash. Many experts believe that they are expecting recession in the coming year. But, honestly, no one really knows exactly. And if you are hoping to buy a new home soon, or already in the process, this post might be beneficial.

As a real estate investor myself in the last few years, I had bought an investment property on the high side. Did I wish it was cheaper? Of course. But, the reality of it tells me a different story. (Disclaimer: it all depends on the area you are investing in. Not all markets are the same). And because my purpose in buying the property was to create cash flow from rental income, I did not mind where the market was as long as I still have a meaningful cash flow at the end of the day.

Now, let’s stop talking about investment property. A lot of people who wants buy a home as a primary home are now contemplating whether or not they should wait until the next housing crash. In this post, I wanted to talk about a few pointers that MAY help you decide.

Your Primary Home Is Not An Investment

This is purely my point of view and opinion. You may disagree with me. When I bought my primary home, I was not looking at it as an investment. I sure hope the value goes up, but even it was not, I could careless. Why? It’s my forever home, even if the value went up 200%-300%, it’s only a book value. I won’t get a dime out of it until I sell it.

You Can Afford It Anyway

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Ideally, we want to spend as less as we can on housing. The cheaper the house that you are buying, the better. But, what if you can’t find anything that suits you? Can you make compromises?. Depending on where you are, the housing inventory might varies. Sometimes (and maybe almost all the time), the house that you fits your criteria, is more expensive than the others that you are looking at. Only you can value the house.

Buying a house is not like buying a car. If you can’t find the right price in dealership, you just go to the next one and still get the same exact car. This is not the case with a house. You can’t find the same exact house, with the same exact location at cheaper price.

Assess what you can compromise. Out of all features that you want in a house, double check to see if you can compromise a few things and settle for a cheaper house at another location.

What if you can’t compromise and you know you can afford it anyway? I’d say, go for it. If you know your financials are supportive, you know you can afford it, and this will be your forever home (no regrets whatsoever), buying a primary home at ANY market level should not be a problem for you.

The house will definitely be cheaper during the crash, but who can guarantee that SAME house will be listed for sale during the crash?

Interest Rates Are Low

Interest is very low right now. Unless you plan to pay cash, the super low mortgage rate is definitely worth the look. Do your calculation, see how much in interest you will pay over 30 years (if you plan for 30 years loan).

Compare that with the amount that you will save if you wait until the crash. Keep in mind, during housing crash, interest rate won’t be this low. You can do some estimates and see if it’s worth waiting.

Bottom line, I think buying a primary home is a personal one. I would go for it if I find the RIGHT one. I would not wait until the market crash as I may have to compromise a lot of things. You don’t want to be kicking yourself 3-5 years down the road that you bought the wrong house. It will costs you even more.

I hope this post is helpful to anyone who is looking for a primary home. I’d love to learn your thoughts on the housing market. Feel-free to write in the comments section below. Thanks!

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