Don’t Buy A House Just Cause You Can

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Eric and I are ready to buy a house. We have been for awhile, so much so that before we knew we were leaving L.A., we were in the process of setting up our first meeting with a real estate agent to discuss numbers. Then the news came that we had to come to Tennessee for a year, and that turned out to be a blessing in disguise in terms of timing. I suspected at that time, what I know for sure now: that L.A. is in a housing bubble. In other words, the prices are higher than they should be. Don’t believe me?Read here, here or here for more expert opinions. It’s sort of hard to predict when a bubble will burst, but it’s fair to say a professional might be able to tell you the window in which it could happen, as the first article I linked to does.

We watched The Big Short this week and all of the guys who bet against the housing market before the 2008 crash knew it was coming in the next few years, just not precisely when. That movie is a financial nerd’s blockbuster. I highly recommend!

So now the question we have been asking ourselves is when do we buy? Being out in Nashville makes it very complicated to buy a house in California before or as we return. We wouldn’t have the luxury of living nearby to view a house the day it hit the market. Or be able to take our time to carefully select. And it also seems unlikely that we would fly out every time we saw a house we liked. Plus, what if the houses are still overpriced by the year’s end when we are set to come back? The thought of returning to L.A. only to rent again and likely in a non-ideal neighborhood is somewhat defeating, but most likely what we’ll have to do. It’s hard to be ready to do something, but know it wouldn’t be the wise choice to do when you want to.┬áDave Ramsey constantly says, “Emotional maturity is the ability to delay pleasure”. And I think that is exactly right.

Am I ready to be a homeowner? You betcha. Am I ready to feel settled with our family in one place? Yes. Do I want a little more room? Yes. A place I can change according to our wants, needs and taste? Yes!! Does that mean we’re going to be doing all those things this year? Barring a huge housing market collapse, probably not. And that’s okay. It gives us more time to save, more time to explore ideal neighborhoods and schools and figure out where my husband will next be working. How complicated would it be to buy a house while transitioning from one job to another? I guess people have to do that a lot when they move for work, but it sounds like a headache. Which job do you put on the application? The one that’s ending or the one that’s beginning? What if there is a gap in between jobs and we have no income for a few months?

It’s worth noting that while Tennessee is generally more affordable than California, we’d be in a similar situation if we were buying here. The Nashville area is H-O-T and prices are rapidly increasing. It’s probably the wrong time to buy here as well, unless you plan on staying in the same house a long enough time to recover from overpaying.

Timing seems to be one of the biggest factors in successful homeownership, but often has nothing to do with why the average family makes the purchase. I hope we can be patient and end up loving where we land. And please, if you are considering buying right now, know that I am not a financial advisor and there are plenty of other resources you can utilize to find the best choice for your situation.