What Are Your Home Buying Goals: A Place To Live, An Investment, Or Both?


What Are Your Home Buying Goals: A Place To Live, An Investment, Or Both?
By Scott Rogers • October 12, 2009
Why do people buy homes? In a context stretching prior to 2002, people bought homes mostly because they needed a place to live --- and buying a home provided stability (your landlord won't kick you out), and had some financial side benefits (gradual appreciation, tax deductions). However, the paradigm of the American dream of home ownership shifted in the beginning of the 21st century when home values started to inflate by 10% - 50% per year in many markets. All of a sudden people weren't just buying houses because they needed somewhere to live --- but also because it would be an incredible investment. This new paradigm can be paralyzing to buyers in today's market. Certainly, people still need a place to live --- but now some buyers become hesitant and unable to act absent confidence that they will also have a strong financial return. I don't fault any buyer for desiring a good return on a home buying investment --- but I don't believe that keeping this new expectation on the forefront of our decision making is sustainable. Let me be more precise: I don't think it's wise for an otherwise qualified buyer to stay on the sidelines (and not buy a house) when the only reason why they're in that position is because they're concerned they might not see a 10% gain in the value of their home each year. I do think it's wise for an otherwise qualified buyer to examine the ways that a home's value could change in the short and long term future before making a decision to purchase. Stated one other way, I don't blame someone for waiting to buy if they think a home's value might drop --- but if you aren't buying because you think you might only see a 3% per year increase in home value instead of 8%, I think you need to reign in your expectations. The astronomical per-year "gains" in home values during this decade are not the new status quo --- they were an exception that we are not likely to see again. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 24, 2024 (unless otherwise noted).
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