Thinking of buying a House, or should I wait? (Austin: apartment, renter)

[Need4Camaro]

I moved in around May of this year.

I'm single and right now paying about $1,400 for a 2BR 2BA Apartment with a Garage, the reason I opted for the 2BR is I needed a Garage as a must.

I know things are really moving here as far as homes go and the market here is hot. I found some homes north of Cedar Park for about $220k which sounds pretty good. The houses themselves weren't bad, 3 Bedroom, 2 Bath, 2 Car Garage. I got approved as well... the only issue is the mortgage is $1,900 a MO with everything included (Insurance, Taxes, Interest, Mortgage, HOA).

Adding that to my combined expenses... I can afford it but I will be completely maxed out as in not even $200 in spare change per month... $1,900 a month doesnt sound too bad for metro Austin but its more so my financial situation that concerns me.

I'm not sure if its worth it...

On one side, the house is likely going to double in value within the next 5 - 7 years and I can make alot of money off the equity and more so its the idea of owning a home while I still can is what is attracting me.

What I'm afraid of is waiting a year or more and the homes in good areas becoming completely unaffordable but at the same time I really don't want to live out a maxed budget either.

I know if I wait, its just going to get worse and Im not due for a raise anytime soon either - although I have the potential to increase my income through other means.

Opinions?

[ashbeeigh]

Is this purely for an investment reason? Do you want to be in Cedar Park? You won't be able to do anything else, travel, buy extra clothes, go out to eat, etc. Is that a burden for you? How are your savings for any repairs? I would wait.

[Need4Camaro]

Originally Posted by ashbeeigh

Is this purely for an investment reason? Do you want to be in Cedar Park? You won't be able to do anything else, travel, buy extra clothes, go out to eat, etc. Is that a burden for you? How are your savings for any repairs? I would wait.

I included food and eating in my monthly expenses. Travel, clothes, ect are not included. Repairs to the HOME are covered for 10 years, my car is under warranty for the next 5 years but warranty means nothing as my car has also been out of service for 2 months due to a power steering issue (randomly losing power steering while driving) which GM has not been able to resolve. (this is about to become a lemon law claim).. Anyway that rant aside, any unexpected expense would be a problem.

Im leaning toward waiting until my income increases which I should beable to do by the time this year ends...I just wanted to know because I know eventually it will be much harder to buy a house in Austin Metro than it currently is.

Edit: One thing I DID start thinking about was taxes however. Right now I'm eating about $1k a month in taxes because Im single with no dependents and no property. Do you think owning a home would beable to offset enough of that to consider it?

[RoamingTX]

Absolutely wait.

That place can stagnate in value or drop value just as fast - maxing out to walk into this market is just asking for failure.

Also, the house is absolutely 100% NOT COVERED for 10 years. There’s a crap ton of stuff that can fail, break or needs to be maintained and that is 100% on you.

You’re not ready to buy. Wait.

[Trainwreck20]

*shrug* personal call. The cost of housing will go up as your pay goes up. If you are ACTUALLY a good-saver, then wait. If you are not, then a home forces you to put your money there (i.e. 'save'). Do you already have the down payment? You can compare the cost of renting vs owning, but there are dozens of variables, some direct, some not - i.e how much extra in gas will you spend due to location?

Anyway, I have an Excel spreadsheet somewhere that tries to put it all on paper with as many variables as possible. But in brief - if you are there 2 years or less, definitely a bad idea in almost all 'normal' scenarios. Five years is a toss-up, more or less. 10 years in the house and you are almost always ahead in any realistic scenario.

Of course, you CAN get a room mate if you have a house. Even a few hundred dollars can make a difference, if you want to put up with that effort.

And look at your taxes. The new personal deduction has gone up, so the math has changed, but you taxes and interest might allow you to itemize and come out ahead.

[Antny12]

Haven’t seen this area “stagnate” or “drop in value” since we’ve been here for 5 years. Quite the opposite. We bought- wanted our own place and of course want to build equity. It’s tough. If you wait you’ll probably be priced out of this area- but that doesn’t mean you should jump into something that might put you in a bad financial situation.

Only you know whether you can or not afford it. If your not head over heels for the area and don’t mind being further out then I’d say wait. If you have some savings- and can swing the bills and costs then I say go for it.

Best of luck.

[kjkw]

The way you described your budget as "maxed out" is your answer. You really can't afford it now. I would say you should focus on saving then look at buying.

[atxcio]

I agree with kjkw, if purchasing the home leaves you with less than $200 to spare, then it is not wise to buy that particular home right now. Work on eliminating other expenses, finding a cheaper property, or finding a cheaper rental for awhile to build up a bigger down payment.

It's OK to extend yourself a bit on your first home -- maybe even good to do so, especially if you are young and expect your income to increase or you expect the property to appreciate. But be realistic, and keep in mind home ownership can be filled with unexpected expenses that a renter would never have to cover.

[Need4Camaro]

Yeah, although I want to do it and am really worried about being outpriced in buying a house in the future, Im not really ready yet. I will keep waiting.

[riaelise]

Condos should also be considered. My first home was a condo