Owning your home is a dream that many can relate to. My first experience with real estate came when my wife and I almost bought our first home in March of 2007. We were very excited at the time because it was going to be our first house and we even drove over to see other similar houses in the same neighborhood at 3:00am. We decided in the end to hold off because we thought the housing downturn would get drastically worst.
That turned out to be one of the best decisions we made financially, as we essentially side stepped the worst housing slump in US history. We reside in California where housing prices were going to the moon, and our decision to hold off on buying that house saved us $200,000. Yet, we still felt like we were missing out while we waited because we didn’t get to enjoy a space we can call our own. I know we don’t really own our home until we pay off our mortgage but signing the closing documents certainly brings the sense of ownership that no apartment living can substitute.
Many argue that a house is a good investment if you can comfortably afford the payments and living in it will improve your quality of life. “A house is a lifestyle investment as much as a financial investment”, one might say. And it’s true. We are no longer renting and it’s been a long time since we woke up to a young lady screaming over the phone at a ex-boyfriend who just broke up with her. Finding a parking spot after a long day is also a problem of the past. Though being frustrated at the lack of space was totally unnecessary, I still remember vividly how I felt after circling around the apartment complex for the 10th time.
Who knows how all these little annoyances affected me personally and financially, but is the lack of all these issues worth $200,000, a sum that takes many people a life time to accumulate? How about $100,000? $50,000? Is there an amount that is worth “losing” for owning a home?
Do you consider your primary home as an investment? And what if there is a 100% chance that your house value will go up? Does this automatically mean that you jump at the opportunity even if you can’t afford the house payments? If all the appreciation paid for was your inflated lifestyle at the McMansion for five years, is the eventual move out and having to readjust after you got used to an inflated lifestyle worth the extra stress? Will your kids be able to understand?