I have some buyers on the fence here. These are buyers with good income, but can't make themselves bite the bullet and buy a house. They want to wait until something in their "desired" price range comes up. Yeah, like that's going to happen! There's nothing on the market that suits them for the price. They can pay more, they just don't want to. So, they wait and they've got a pile of rent receipts to proudly show for their stubborness.
In Wenatchee, Washington we are in one of the lucky markets that is not experiencing a real estate downturn. This continued strength is for a multitude of reasons, including our strong and diverse economy and the fact Wenatchee was recently named the "Safest City In Washington"
The sad truth is... for the same $$$ you can either rent a nice house, or buy an ugly house. Or, you can pay more per month and buy something nice. The landlords, of course, hope you keep renting because their property values just keep going up and YOU are paying their mortgage. It's costing them nothing. At current appreciation rates, two years from now their property is worth 32% more and you have a bigger pile of rent receipts. Whereas, if you bite the bullet and buy a house now... YOUR house would be worth 32% more in two years and you have equity that is worth real, tangible, dollars to you.
Here's my personal real estate buying story for illustration: As a single woman, in 1973 (at the age of 21) I bought my first house...a little rambler for $20,000. I had a $2,000 downpayment and that got me in. 6 years later I sold it for $46,000 and bought a house for $79,000. 5 years later I sold that house for $99,000 (it was a flat period in real estate) and bought a house for $205,000. That was a big leap. It was the most expensive house in the county that year and my payments tripled. BUT, 6 years later I sold that house for $395,000 and bought a house for cash with the built up equity from all of these transactions. After that first house, I never put in more money, I just kept rolling my equity up. The reality is, if I consider the tax benefits and appreciation I have actually earned money by owning a home. Although I made house payments, paid taxes and insurance... those payments were, essentiallially, rebated to me through tax returns AND equity whenever I sold a home. I now own a home free and clear (and had money left over) and it feels great. Tax accountants argue it's not good to own a home free-and-clear, but it feels good to me!
Everyone must decide for themselves when the time is right to buy a home. It's a big decision and can be downright scary. All I know is if I'd waited until it was "affordable", I'd still be renting....33 years later. As it is, I am 54 years old and will never make house payments again, unless I want to!
My advice is: Buy as soon as you can. Buy as much as you can. Trade up whenever you can. Do not do so with reckless abandon, however. Be financially responsible and enlist the guidance of an experienced real estate agent who can advise you based on current market conditions.
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Carol, that is a great example of real estate success. Young home buyers just don't understand how lucky they are to have "time on their side." Buying now does not mean you are stuck with that house forever...just until the next one comes along.
kk