In real estate, we have this phenomenon called the starter home. It has been sometimes used as an excuse for buying something that we really don't like very much, but we want to own it anyway. It only has two bedrooms, and it's really small, but it will do for a starter home. It's next to the rail track, but it will do for a starter home. You have to walk through a bedroom to go from the kitchen to the living room, but it's fine for a starter home.
Many buyers and some of the professionals who help them excuse fundamental reasons for not buying a particular property by calling it a starter home. Today, there is a half generation of owners of starter homes who are locked into them because of deflated values and negative equity. The smartest of the presently immobilized half-generation are comfortable and have no compulsion to leave immediately. Many of them could afford a higher payment, but they bought right when they bought their starter homes. The fact that they can't presently afford to sell is a minor inconvenience at most.
Smart buyers in 2005, just like smart buyers in all years, understood that they were buying a home that they could have to live in for a very long time. Some still love their homes, and they wouldn't move if they could. Some are suffering the consequences of their mistakes. Some would like to move, but they don't feel that they are in a really bad situation. They're comfortable enough, and the neighborhood still feels like a good enough fit.
My starter home turned out very well. That was not by virtue of our excellent insight or expert advice. We were just plain lucky. We had made a decision to move to Minnesota from Illinois, and my employment at the time was with an airline. After growing up next door to O'Hare Airport, I knew that we needed to be ten miles from MSP, and not in the direction of metro traffic. We drove from Illinois to MSP and headed away from the metro. Almost exactly ten miles away in Apple Valley was a sign advertising new homes for sale. We stopped and bought one. We sold our starter home twenty-seven years later.
If you're looking for a home, don't look for a temporary home. That's one of the purposes of rentals. Buy a home that fits you and your family, including those on the way for the next several years. Buy a home in an area that feels comfortable and stable. Buy a home you could live in forever. It will be easier to sell if you want to move, and it will be easier to live in if you need to stay.
Comments(8)