Being a real estate newbie, I’ve been reading a lot of housing market articles lately. It seems like everyone has an opinion. Buy now. Buy next year. Sell now. It’s a bubble. It’s not a bubble. You know what it reminds me of? The stock market.
And therefore, just like the stock market, perhaps it is simply best to buy for the long-term and ride everything out. The median home price in June 1976 was $46,100. The median home price in June 2006 was $243,300. Did really matter if a person bought it for $42,000 (10% less) or $50,000 (10% more) back then? Not in my opinion, especially considering I see no proof that anyone can predict housing prices. At the very least, I’m certain that I can’t predict housing prices, and that’s what really matters. Just like the (good) investing books say, it’s time in the market, not timing the market that counts.
Even if I decide to move, I expect my new house’s price to move up or down with the value of my current house. On top of that, I’ll probably try to rent my first house out if at all possible. Finally, if the market does tank, perhaps that will provide a buying opportunity for an investment property.
So here’s my game plan: 1. Get 20% down, or at least 10% and no PMI. 2. Decide on an affordable mortgage amount. 3. Find a good house, regardless of future price predictions. So far I’m still working hard on #1…
Or am I all wrong?
By Jonathan Ping | Real Estate | 12/5/06, 11:07pm