A few weeks back some really nice clients took me out for dinner. Two years ago they sold a house they had inherited in the Bay Area and moved out here to begin their professional lives. They were looking for fewer crowds, access to outdoor amenities and a good place to raise kids. Looking in the $600K – $1 million range, they were excited about what they could afford here but were also nervous about buying due to reading the blog about signs of slowdown. We would go out maybe 2-3 times a year to see something specific, but when asked if they should buy now, I advised patience because it always seemed as though next fall/winter values would improve.
Settled comfortably in a rental situation, they were flexible about waiting. By the time we got to dinner two years later, they were sooooo happy they hadn’t bought, as they would have lost major equity in anything they purchased, at least $400,0000 is my guess based on what they were drawn to then.
My own blog saved me an estimated $271,000. I had been in contract for two years to purchase a new home that would serve as a rental and had even put several thousand up front into upgrades. But when the time came to buy, my stomach churned, and I had this gnawing feeling it would probably be a bad deal in the long run. Giving up a nearly $10K deposit was tough, but obviously now worth it. Some investor recently bought the same model home at auction last month for 38% of what I would have paid, so thank you, commenters. Watching the market numbers dispassionately and listening to the intelligent discussion on this blog really pays off.
Happy Saint Patrick’s Day!