I think I have figured something out in the housing market. I am posting it here, to see if my line of thinking is right (or not).
Now, many of you know me and Baseball boy, and do not think we are ready to buy a home yet. I am still enthusiastic about buying a home, but not 100% committed to it either. I am still just watching the real estate market, and trying to see how Baseball boy and I fit into it. When the timing is right, I am confident that all this market watching will educate me to know it is time to buy.
We have been looking to buy our first home for almost a year now. We have been looking for an older home (pre 1930's), because we love the historical feel, especially Victorian architecture.
Several of the homes we initially saw on the market around christmas time are still on the market today. However,there have been NO PRICE drops in the 8 months we have been looking. "Where are these big discount deals?" we wonder.
I thought maybe because the town was not vulnerable to the flipping mentality, maybe the economy didn’t change so dramatically during the boom that people were buying into the alternative mortgages expecting their incomes to increase, maybe people who buy older homes stay in the homes much longer than people stay in newer homes, maybe because the older homes are 'specialized' in a way and the owners wait for the ONE buyer who will LOVE their house...I don’t know.
I have come to the realization that maybe the fact that it's an OLDER HOME we are looking for is the reason for the steady home values. All these 50-100k price drops are on NEW CONSTRUCTION which was built on city outskirts when there were large population fluxes and economies were booming and job growth in the towns was increasing.
Now jobs are declining somewhat or holding steady, and people are no longer moving to the suburbs because there is plenty of housing available in the cities. And older homes tend to be located in the heart of cities.
So...maybe these big price drops I have been waiting for are never going to happen for me?
I wonder then if my fiancé and I should actually change our dream to accommodate the current economy and the deals available.
It seems stupid to buy a high priced home in a land of incredible deals, but it also seems stupid to buy a deal of a home because it cannot hold its value.
We are looking for our 'forever home' and plan to stay in this home for at least 6-7 yrs, then we are planning to rent it out if we need to trade up for a bigger home/better school system due to family needs. We can’t predict the future, there is a possibility we will need to move, but we still plan to keep this home in our possession for decades regardless of our circumstances.
So do we give up on our plans and learn to love new construction? Or buy a more expensive home that is 'not on sale' because it has proven it will retain its value?
But since it is our 'forever home' then resale value is not very important, or since it is our 'forever home' then we should buy what we want?
Oiy. These are new concerns for me. I wish I was like so many others I know who just go out house hunting and come back 2 weekends later telling me they made an offer on a house and it has been accepted. Housewarming party is in one month.
Old construction housing values