Beyond BuzzFeed: Tackling the 25 Toughest Homeownership Questions – #11
This essay delves into the complexities of timing the real estate market, emphasizing why waiting to buy a home may not always be the best strategy. Through a blend of personal reflections, literature, and expert opinions, we explore the nuanced decision-making process of home buying amidst fluctuating market conditions.
Three Main Takeaways:
The Myths and Realities of “Timing the Market”
The Emotional and Financial Impacts of Homeownership
Why Home Is More Than Just a Financial Investment
By analyzing the challenges and opportunities of buying a home in today’s market, the essay encourages readers to consider both financial and personal factors. How will these insights influence your decision to buy a home now or later?
Where the dream of homeownership seems increasingly out of reach for many, a recent Buzzfeed article captured 25 critical issues that today’s homebuyers are grappling with, from …
This blog series aims to take a deep dive into each of these 25 Buzzfeed issues. We’ll explore every facet of the current market conditions. Each post in the series will tackle one specific concern, providing insights, expert analysis, and practical advice to help you navigate the complexities of buying a home in today’s economic environment.
Whether you are a first-time buyer, a seasoned investor, or simply curious about the state of real estate, this series will provide perspective to help you make informed decisions.
With some of these widespread concerns laid out, let’s dive directly into one of the Buzzfeeed voices:
“The combination of low inventory, inflated prices, and interest rates is the worst for buying a home. We would end up getting an older home that we didn’t love, and it would likely need work, or else things would start to fall apart. All at a price that we know is too high and not what it’s worth — and a mortgage that is three times what we would have gotten just a few years ago! Forget it. We’ll wait.” —Anonymous, 39, Washington, DC
Wait on what?
We’ve covered much of Anonymous’ concerns in previous posts; so I want to center in on this idea of waiting, or “timing the market.”
Anybody who says this—“Forget it. We’ll wait,” doesn’t really want to buy a house. And you know what? That’s perfectly acceptable.
Homes as Financial Investments
I think, however, that we have conflated homes with financial investments, and in a way they kinda are financial vehicles in the sense that they are turned into a forced savings account through the building of equity. Or, they are actual real financial investments in the form of rentals and house flipping. You can think of being a landlord as holding onto index funds in the stock market—they’re boring, but they are tried and true and going to get you to the finish line in the end. And you can think of house flipping as day trading—volatile, risky, potentially huge reward.
A Realtor, a stockbroker. Or a sleazy used car salesman. Take your pick.
The Essence of a Home
We forget though. A home is a home is a home. And is full of mystery and memory and dust. My dad was a collector of old books, which were stored away in the dining room, which we really just called the “Family Room” with the puke yellow shag carpeting, and the big steaming wood stove my mother boiled water over in the winter to keep the air moist. Every time I read The Lion, the Witch and the Wardrobe I’m reminded of my childhood home, the big blue house on the top of the hill.
It was the sort of house that you never seem to come to the end of, and it was full of unexpected places. The first few doors they tried led only into spare bedrooms, as everyone had expected that they would; but soon they came to a very long room full of pictures and there they found a suit of armor; and after that was a room all hung with green, with a harp in one corner; and then came three steps down and five steps up, and then a kind of little upstairs hall and a door that led out onto a balcony, and then a whole series of rooms that led into each other and were lined with books–most of them very old books and some bigger than a Bible in a church. –CS Lewis, Chapter One, The Professor’s House.
Where the Professor’s house was an invitation to explore and adventure, Laura Ingalls Wilder built us a home that protected from the outside.
All alone in the wild Big Woods, and the snow, and the cold, the little log house was warm and snug and cosy. Pa and Ma and Mary and Laura and Baby Carrie were comfortable and happy there, at night. Then the fire was shining on the hearth, the cold and the dark and the wild beasts were all shut out, and Jack the brindle bulldog and Black Susan the cat lay blinking at the flames in the fireplace. Ma sat in her rocking chair, sewing by the light of the lamp on the table. The lamp was bright and shiny. There was salt in the bottom of its bowl with the kerosene, to keep the kerosene from exploding, and there were bits of red flannel among the salt to make it pretty. It was pretty. Laura loved to look at the lamp, with its glass chimney so clean and sparkling, its yellow flame burning so steadily. and its bowl of clear kerosene colored red by the bits of flannel. She loved to look at the fire in the fireplace, flickering and changing all the time, burning yellow and red and sometimes green above the logs, and hovering blue over the golden and ruby coals. –Wilder, Little House in the Big Woods
Homes Beyond Financial Value
Maybe it seems strange I’m writing about the home from a literary perspective in a series of posts that are supposed to address America’s financial woes of purchasing a home.
But I like what financial guru Kyla Scanlon says about the home: “…housing is a very personal experience. It’s the ideal state, home ownership.” She goes on to explain that owning a home is not the best way to even build wealth. If you had $10,000 invested in equities in 1974 (the year after I was born), today, that cash would be worth 2.4 million dollars. The house you bought with the same 10k? $139,000.
$139,000 is a nice savings account, but not true wealth in the financial sense.
Unless you are actually investing in real estate as a portion of your overall wealth strategy, we need to be honest with ourselves about what we are actually buying when we buy a house. I mean, seriously, this is why I’m developing a signature scent for my open houses—not because a smell is going to increase the dollar value of the property but because scent is one of our primordial senses, the olfactory a direct link to our basic instinctual memories and emotions.
The Market and Preparation
The markets are going to do what the markets are going to do. There is no timing, there is only preparation for the opportunity when the opportunity presents itself. Again, we are talking money here. Home prices will always fluctuate, mortgage rates will always rise and fall. Will we ever see 3 and 4 percent rates again?
Sure.
Though no one can say when, and if you’re not prepared for the rates to drop now, you won’t be prepared when the rates actually do drop.
But if you yearn for home. If that’s what you desire, if that is your dream. If that’s what you want, why wait?
