If you were in the middle of your home search, waiting for the summer or on the fence about purchasing a home prior to Covid-19 you may be asking yourself, “Is now a good time to buy a home?”
With all the economic uncertainty going on right now this is a reasonable concern. If you are out of work or your financial situation has changed drastically your home search might need a pause. But if you are still employed and don’t foresee any employment issues then your only concern might be where the market is headed.
If you are considering a home purchase I would suggest looking at a home’s value. I don’t mean just the price and monthly cost, I am talking about that and everything you value in a home from its location, amenities, long term wealth growth, and happiness. There is more to a home purchase than the price and I think it is important not to lose sight of that even in uncertain economic times.
Many of us live with the scars of the Great Recession that started in 2008. We saw how crazy markets can wreck an economy and a housing market. Though that housing crisis was a once in a lifetime event that is not similar to what we are experiencing now. What we are likely seeing here is a more natural ebb and flow of the housing market. With that natural growth and decline it is impossible to perfectly predict the market. If as a buyer you are trying to pinpoint the exact time you can buy a home at the cheapest you will inevitably get caught in a cycle of deal searching. If your desire for a home is only if the market is right then you are missing out on what may be important to you and your family in a home. My point is, don’t be obsessed with the exact dollar amount of the home as home values can fluctuate for a number of reasons. Be more concerned with whether you can afford the payment now and going forward. For example, if you bought a home today and over the next 2 years the value dropped 10% that would not be good. But, does it really matter for your day to day life? If you plan to live in your home for the next 20 years home prices are going to fluctuate during that time and you’ll be riding the markets up and down over that span. So really the home’s value is just some number on paper.
Once we can move past the home’s dollar value lets look into what else you value in a home. Is the location near to work or school? Is the neighborhood the type of place you can see yourself living for the long term? Does the community have any amenities that are important to you? All of these things and more add value to your life. What if you paid more for a house closer to work and ended up with a higher monthly payment of $30. Compare that to buying a house farther out where you burn more gas back and forth. The extra automobile cost may actually cost you more than $30 a month in gas and car maintenance in the long haul. Or, if the community has a pool does that save you from having to install a pool in your backyard which is expensive. What you value in life should be reflected in the location you choose.
For the house itself, there are a lot of things to consider about your personal values. Will the home meet your family’s needs for the long term? What about the home meets your life goals and adds value to it? As many people are experiencing now working from home can be a challenge. Would a home that has a separate office space so you can work from home more regularly be useful for your life? Also, for some people a house can be a hobby they love. Many people feel great satisfaction and pride in restoring and maintaining historic homes. Consider whether you love the “work” of a home and whether that brings you happiness. If not, maybe a new home is right for you.
So if you are considering a home purchase in today’s market don’t obsess over the economy or market dynamics. Focus more on your personal and family life. We can only worry about what we can control. Beyond that you are causing yourself stress and anxiety by giving energy to things that are out of your control. Make your house a home by choosing what you value in a home and not worrying about the dollar value in up and down housing markets.
Work with a trusted and professional Realtor who can help guide you through the home buying process!