If you are in the market to buy a home of your own, you
need to ask yourself one question: WHY?
It seems like a simple enough question yet it is not. Experts are predicting
that, in many markets, prices will continue to soften (see our blog
from yesterday). That has caused many buyers to stay on the fence of
indecision hoping to buy at the optimum time. If the reason you are buying is to
do a quick ‘flip’ of the property to make money, waiting most definitely makes
sense.
What if the reason you are moving isn’t about finances however. Does it still
make sense to delay? That depends on why you are buying. What if your purchase
is more about improving the quality of life for you and your family? Or moving
into a school district where your child’s talents will be maximized? Or being
closer to friends and family? There is a cost to delaying any of these
decisions.
We realize everyone wants to make a sound financial decision no matter the
actual reason for moving. Delaying in a hope to ‘time’ the market might not make
sense however. Forbes.com addressed this issue in an article by John E.
Girouard last week:
“Trying to time the housing bottom is as much folly as trying to time
stocks or any other investment vehicle. In fact, it’s greater folly because if
housing prices do fall further, it’s likely to be because mortgage rates are
rising, which would mean that over the long term that slightly lower price you
may have paid could end up costing more in carrying costs than you
saved.”
He went on to say:
“My answer to those who ask whether now’s the time to buy a house is that
the American Dream is and always was alive and well. It has nothing to do with
the direction of housing prices but everything to do with your financial
situation, income stability, ability to shoulder the costs, and if the home you
have your eye on is your version of the American Dream—a home you love that you
hope to live in for an extended period.”
Bottom Line
Don’t make buying a home solely a financial decision. Is the real reason you
want your own home more important than money? Only you know the answer.