I beg to differ, in the long run you’re not OK if you consider what you have to give up in order to own your house.
Don’t listen to the sales people and calculate the opportunity cost of buying at the wrong time. Over time, with interest and lost opportunity, you might end paying triple or quadruple what others pay for the same house at the low.
So you bought at $575k and prices drop to $350k. Even if you can afford the payments your opportunity cost of remaining in that house long term are very high.
Suppose your hunker down and remain in the house. You and your husband have good jobs and you stay put. Your house drops to $350k but you stay put and the market recovers by 2020.
Now look at property taxes. By 2020, the taxable basis of your house will be $743,823 (at 2% annually) for property taxes of $8925 in 2020 (at 1.2%). Someone who buys in 2012 for $350k will have a property tax basis of $410,081 or $4,921 in taxes in 2020. You’re paying $4,004 more than your neighbor who was lucky to buy at the trough. That’s a trip to Europe you’re giving up EVERY YEAR just for buying at the wrong time, even if the market recovers.
If you put the information in a spreadsheet and calculate the difference between buying at the high or low, you’ll be shocked!
Look at the extra interest, maintenance, taxes and HOA you’re paying. They add up very quickly over time.
Given the same amount of money, your standard of living would be clearly better if you are lucky or smart enough to buy at the low.
