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Is not buying a home good advice?

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  • Is not buying a home good advice?

    I have followed the advice of WCI and others of not buying a home until you have a stable job. I can tell you that I regret it significantly. I’ve lived in the same area but have had 3 different jobs in 4 years. Sure there is still a possibility of needing to move away as my area is a horrible market for my career but if I would have bought 2 or 4 years ago I would have saved hundreds of thousands of dollars. Home values in my area have more than doubled in that time. Is this really sound advice to not buy until you have a stable job, especially with the boom in real estate?

  • #2
    Yes, it is sound advice. Especially for someone that has been in 3 different jobs in 4 years in an area that is a horrible market for your career. Your saved hundreds of thousands of dollars figure is very theoretical.

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    • #3
      I think the bigger takeaway might be to look at better markets for your career rather than buying a house that might tie you to what you’ve described as a terrible market.
      Last edited by Hank; 01-24-2022, 05:56 AM.

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      • #4
        Compensation, job, location.
        BSed on the job changes and what you describe as a horrible market, feel free to be a real estate investor. Comp and job seem to be secondary factors.
        If you do change your process, I would suggest renting until you find the right mix. Anywhere you want. I doubt you changed jobs because of location. That is where you are.

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        • #5
          Originally posted by Hank View Post
          I think the bigger takeaway might be to look at better markets for your career rather than buying a house that might tie you to what you’ve described as a terrible market.
          Ah.........yeah...... I mean, 3 jobs in 4 years. I would focus on that. Why? Also, why would you stay in that place?

          You said: "Sure there is still a possibility of needing to move away as my area is a horrible market for my career" Read that to yourself.

          Does the place suck? High cost of living and bad job market?

          If so, and there is a better place, you should escape.

          That is the benefit of renting. Why would you stay?

          Not trying to encourage you to have another job change but I would at least make sure that the current one is a good fit for the next 5 years.

          Changing jobs sucks. Moving sucks. Do it as few times as you can and be stable before you buy, and don't stay some place that is "horrible for your career".

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          • #6
            The pendulum swings both ways. Maybe in a couple years when you have moved on from that horrible market you will be happy with your decision.

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            • #7
              It is good advice. That doesn't mean that in retropsect it will have been the optimal option for everyone. Advice is given on what is stastically the most prudent and avoids excess risk. Putting all my savings into Tesla (TSLA) two years ago would have resulted in great returns but I would not consider putting all your money in a single stock good advice.

              I bought a home right out of residency and it worked for me (I had not started reading WCI or other fiance advice) but statstically the risk is not worth return in most situations.

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              • #8
                Originally posted by MOMS View Post
                but if I would have bought 2 or 4 years ago I would have saved hundreds of thousands of dollars. Home values in my area have more than doubled in that time. Is this really sound advice to not buy until you have a stable job, especially with the boom in real estate?
                Ah, you are now playing a Monday Morning Quarterback. I could also say that I should have put my money in Tesla and Amazon 5 years ago than in that stupid VSTAX. Hindsight is 20/20.

                What if this was 2006? Would you have come here in 2008 and made the same comment of regret about not buying a house?. I bet you would be singing a different tune.

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                • #9
                  Alright alright, I get it. I know I made a bad choice moving to this location but my wife’s family is here and it’s where she wants to live. It was a major financial and career mistake. We may end up moving soon which would be great from my standpoint. If I would have bought a home right away the choice to move here would have been less painful at this point. Hindsight is 20/20

                  I mostly should have left that part of my story out and just asked the question regarding the housing shortage and no signs of it slowing down. Does that change anyones recommendations to rent vs buy? The reasoning for renting for a few years seems to be a financial decision based on average increase in home prices over time. Those have skyrocketed and are continuing to rise. Should the recommendation change as well?

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                  • #10
                    Originally posted by MOMS View Post
                    Alright alright, I get it. I know I made a bad choice moving to this location but my wife’s family is here and it’s where she wants to live. It was a major financial and career mistake. We may end up moving soon which would be great from my standpoint. If I would have bought a home right away the choice to move here would have been less painful at this point. Hindsight is 20/20

                    I mostly should have left that part of my story out and just asked the question regarding the housing shortage and no signs of it slowing down. Does that change anyones recommendations to rent vs buy? The reasoning for renting for a few years seems to be a financial decision based on average increase in home prices over time. Those have skyrocketed and are continuing to rise. Should the recommendation change as well?
                    Reasonable question. If you are convinced prices will continue to rise at their current rate then I would buy. However, it is challenging to predict the market. Interest rates will likely be rising which may cool housing. It does seem like there is no sign of slowing but the market can swing rapidly.

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                    • #11
                      Originally posted by MOMS View Post
                      I mostly should have left that part of my story out and just asked the question regarding the housing shortage and no signs of it slowing down. Does that change anyones recommendations to rent vs buy? The reasoning for renting for a few years seems to be a financial decision based on average increase in home prices over time. Those have skyrocketed and are continuing to rise. Should the recommendation change as well?
                      The reason for renting has nothing to do with average increase in home prices over time. Your premise for approaching this question is wrong. It's because a decent percentage of new attendings are moving to a new area or taking a job that they won't know if it's for them until they've been doing it for a while. Many people don't stay at their first job for longer than a year or two, as you've personally experienced. Many of those decide to move after that. Transaction costs are a very real thing and add up over short periods of time. Renting is not throwing money away at all. Remember that renting is the most you'll spend for your housing while a mortgage is the least you'll spend. Home ownership typically comes with significant costs.

                      With the additional information you've provided, your issue isn't that you didn't buy a house. Your issue is that you're upset that you're living where you're at because that's where your wife wants to be. I'd forget about buying vs. renting and I'd look deeper into those feelings with your wife.

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                      • #12
                        I've missed or passed on many opportunities in hindsight which is always 2020 however overall I stand by the decisions I made at that time with the knowledge available to me. The good news is as high earners and responsible humans we will be ok regardless. Cord pointed out what struck me as significant in your case because I doubt you will be able to get away from that area if your wife is rooted and if you do move I suspect she will eventually bring you back.

                        As for the housing market I've been in the game for decades and while my crystal ball is also cloudy I have yet to see a seller's market not followed by a buyer's market. There are always different nuances responsible and places like CA and NYC should be excluded because they are a different animal. My guess would be that many of the people who have swum upstream for an overpriced house that they really didn't love during the past two yeas will be disgruntled and want to move in the near future which will result in a glut of properties available. Even if the prices don't fall the selection and terms such as being able to actually request a home inspection without losing the deal will make it more favorable for buyers. One thing I can say with certainty is that most Americans can not delay gratification which creates opportunities for those of us who can.

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                        • #13
                          Rationale Reminder does a very good comparison of renting vs buying. It is geared towards the Canadian market, but still a good listen

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                          • #14
                            The reality is that Housing is consumption.
                            Consume what you need and can afford. A residence has costs.
                            Now a house as an investment is a different question. You could have bought a house as a rental property and reaped the benefit of the appreciation as well.
                            Long term residence ownership is better.
                            Shorter term. Rent.

                            If you truly believe the price escalation will continue, you would go big and buy everything you could. You sound rational., I doubt you would consider real estate as a 100% investment. You recognize the risk of continuing appreciation of real estate investments.
                            The rule of thumb applies to the residence only.
                            That is the consumption. Just a different way of viewing housing. You missed some investment appreciation. That is not the purpose of a residence, it is a place to live, rent or owned.

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                            • #15
                              Originally posted by MOMS View Post
                              especially with the boom in real estate?
                              lets see how long it lasts

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