I am buying a home right now, that should close in 3 weeks. Everyone’s situation for buying is different, so it is impossible to generalize. However, I am in no false illusion that the property I am buying will not decrease in value in the next couple of years, I am not buying it as an investment. We have horses and 3 large dogs ( 160 lbs each ), so we need some property. I have rented since Sept of 2005, and am buying back in for about 900k less than I sold for. Since this was my goal, and I found something that is more of a unique property, I decided to just buy it. Had I been looking for a tract home, I would have stayed on the sidelines. I just am of the opinion that our needs are unique and that even in a severe drop, there is no guarantee I could find something like this no matter what the price.
I have more money in cash than the total cost of this place, so it is not a stretch at all. I just thought I would offer this as an example of someone who is buying right now. I am not a traitor, I still think prices are coming down. Renting in our situation with the 3 big guys and the two horses in a separate place just became too much of a fiasco. I have saved enough to have made it worth the exit and re-entry.
We can even monitor how my value does just to see how much buying early in the down cycle hurts. However, valuing this place was a trick, the comps were hard to find, and all were itleast 200k to as much as 400k above the sale price. As a result, it might be tough to evaluate how much this fluctuates up or down. I am not sure that we really know even now the correct value for this place.
The sellers are in the midst of a nasty divorce, which has effected the price I think. We got to witness live in prime time a battle between them. I am planning on it being worth what it is now or less in 10 years, and it will be paid off before then. Anything beyond that is a bonus. I have never believed that home buying should be viewed as an investment. There is the opportunity cost argument, which is valid, but for the peace of mind for someone in my position, it was a no-brainer decision that I made within a day of seeing it for the first time.
BTW – I have used SD Realtor on this transaction and I highly recommend him. Adam is very thorough and intelligent, and is so superior to the listing broker on this, words could not express the difference. Cheers to Adam for being such a great help, and also being a very level headed professional! I will definitely use him again on my next RE transaction.
