I think what your spouse does not realize is how bad a 10 to 15% reduction is, or how long it takes.
The last housing crash was about 10 to 15% down and it was awful. Many people think housing prices in the 90s really crashed, like the stock market, which wasn’t the case. Median price was only down 10 or 15% and people just got killed.
10% of a $500,000 home is $50,000.
Does he make $50,000 in a year?
He is trying to tell you that you stand to lose $50,000 and that is OK? A year’s salary down the drain, but renting is a waste of money?
Amazing to me that anyone could think “it will go down 15% so I’m gonna buy.” Amazing. Tell him to listen to himself.
Also, consider the amount of time it takes for the market to cycle down 15%, then back up. It could take several years for the market to go down and several more for it to come up – call it 7 to 12 years. That is a long time to not make any appreciation.
Plus, you have to be certain that life will not deal you cards which force you to sell when the market is at its worst.
Also, keep in mind if it goes down 15%, it has to come up 17.6% to be even.
Finally – very compelling is the annual pattern of sales from year to year. Always, there are significant sales in the spring and summer, then buyers dry up until next spring. Better to buy later in the year or in January, when the market is really hurting.
