Buy a home or wait out this insanity?

[Tangler]

I feel like the latter is more likely... plus, as we've seen throughout the pandemic theres really two different worlds out there for workers. Unfortunately for physicians, they're competing with the ones who are doing really really well

Docs can still afford homes.

Markets go up down & sideways.

Cannot time market.

Just need to time your situation. Ensure you are ready to buy and buy, hold for > 5-10 years and ignore the noise.

[jz-]

No crystal ball here, but I know there will always be another recession. Woefully, some homeowners will lose their homes, the FED will drop interest rates, and the Prepared will pounce.
That's the anguish of us optimizers; we have knowledge and plans but no crystal ball. What's the outcome of crypto? When's the next recession? How high will interest rates climb? Will future tax brackets rise?

[resident_1]

Larry Summers (former treasury secretary) is writing that fed will raise rates to 4-5%.
What mortgage rate will that generate?
The way this decade is going I wont be surprised if recession will occur in next 8years.

[CBCwDiffpls]

Rates rising, and home prices going up also. Getting more and more unaffordable.

[Tim]

Larry Summers (former treasury secretary) is writing that fed will raise rates to 4-5%.
What mortgage rate will that generate?
The way this decade is going I wont be surprised if recession will occur in next 8years.

Speaking of recessions, interest rates and inflation, data needs to always be taken in context and “adjusted”. NBER is the official group to announce we are in a recession, and by design they are alway 6-9 months late. Kind of crappie moving data too.

https://www.advisorperspectives.com/dshort/updates/2022/04/04/the-big-four-economic-indicators-march-employment

Raw data is so incomplete and adjusted to find the “real” metric. Which probably will be adjusted later. Summers is a bright guy. As long as he is guessing too.

[prpdoc]

Similar situation as OP, this is madness here I’m in a HCOL and deciding to wait as this cannot sustain with both increasing rates and home values or make a move on something that isn’t what we need in 5-10 years

[jellowars]

We're in a similar situation in a VHCOL area. Seems that we keep getting outbid by all cash offers or offers that are $90-120k over asking. I know people say to buy when you're ready and try not to time the market, but this seems like a lot of panic/emotional buying. I feel like going that high over asking is digging yourself a hole. I'm OK with listing prices at this time, but not OK going $100k over asking. Does it make sense to wait out the market a bit until there's fewer buyers (with the understanding that the listing prices may not necessarily trend down)?

[bovie]

We're in a similar situation in a VHCOL area. Seems that we keep getting outbid by all cash offers or offers that are $90-120k over asking. I know people say to buy when you're ready and try not to time the market, but this seems like a lot of panic/emotional buying. I feel like going that high over asking is digging yourself a hole. I'm OK with listing prices at this time, but not OK going $100k over asking. Does it make sense to wait out the market a bit until there's fewer buyers (with the understanding that the listing prices may not necessarily trend down)?

Yes, of course it makes sense.

But there is a risk to that as well—which you have identified.

Solution: Buy when you’re ready, and at a price you deem fair.

[uksho]

Yes, of course it makes sense.

But there is a risk to that as well—which you have identified.

Solution: Buy when you’re ready, and at a price you deem fair.

Absolutely, but how do you decide if it is a fair price ? The prices don’t seem fair , when you are a buyer but to the seller, they do .

[CordMcNally]

Larry Summers (former treasury secretary) is writing that fed will raise rates to 4-5%.
What mortgage rate will that generate?
The way this decade is going I wont be surprised if recession will occur in next 8years.

Considering that on average a recession occurs every 4-5 years, I don't think that's a very thin branch you've walked out on.

[Tim]

Considering that on average a recession occurs every 4-5 years, I don't think that's a very thin branch you've walked out on.

But real estate is local and different price ranges react differently. Different tree.

[StarTrekDoc]

If you're willing to wait 8 years, that's not really ready to buy but looking for market price g to match yours.

As far as fair pricing, with each closing you have at least that buyer making a fair offer in their minds
Yes, it's an emotional buy. It's your home. Quite personal. That's why when you're ready dive in cause you don't know when the market is going

Last year people thought the same. And now it's 15-20% the emotional higher route

We sold last year and could have carried two mortgages and made out with another 600k. That went against our plan, so didn't do it. A prudent investor may have though....but not us.

[bovie]

Absolutely, but how do you decide if it is a fair price ? The prices don’t seem fair , when you are a buyer but to the seller, they do .

In this market, sure. Other times, it’s the opposite.

You just have to do your best to decide where your equilibrium lies.

You're right—it’s not easy, is likely frustrating, is an inherently emotional decision, and there’s lots of gray.

But you just have to do the best you can by appropriately weighting the factors that are most important (or not) to you in terms of intrinsic value—location, commute, schools, lot characteristics, square footage, etc.—and comparing that to the financial value of a potential purchase price.

At the end of the day, if it’s worth it to you, then it’s fair.

[Tim]

If you need a house, buy it.
If you don’t, sell it.
Gotta sleep someplace. Stop think about a home as an investment.

[bovie]

If you need a house, buy it.
If you don’t, sell it.
Gotta sleep someplace. Stop think about a home as an investment.

Sure, but that oversimplifies the issue.

Absolutely right that primary residence is not an investment, and that you have to sleep someplace.

But you still have to evaluate it deeper than “if you need a house, buy it.”

Everybody needs clothes, and some might prefer Brooks Brothers to Old Navy—or the other way around—but while they both satisfy the stated requirement there are clear differences, not least of which is price.