Q: When are you going to stop sitting on that fence?
A: I don't know yet.
A post last week about the cost of renting by Brad Andersohn gave me a flashback to a post I wrote in my very early blogging days. When I went back and read it, I couldn't help but think it is as true today as ever.
This post was originally published on October 31, 2006. Since I retired from active listing and selling and property management in 2011, I decided I needed to remove old contact links and remove links to old websites and blogs.
Also, please keep in mind that I am no longer licensed and cannot be your real estate advocate. However, if you are looking to buy or sell a home or investment property in Wenatchee and don't know who to call, let me know. I can make some recommendations of highly qualified agents for you to interview and hire based on your specific needs. I get no financial compensation for these recommendations. I just want you to have a great buying or selling experience.
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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 rarely experiences a real estate downturn. This continued strength is for a multitude of reasons, including our strong and diverse economy, 300 days of sunshine, and desireable lifestyle.
The sad truth is... for about the same $$$ you can either rent a house or buy a house. 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 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 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, essentially rebated back 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 may 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....45 years later. As it is, I am 66 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.