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I'm looking at buying a condo in Phoenix or Las Vegas. My job is remote and I run an online business as well. After taxes, I bring in $4.2K per month. Not much, but as a single 25-year-old with no debt it's alright. I have $160K in liquid assets and I'm looking to buy a 2 bed/2bath condo. I Realize HOA fees in these cities are around $200 per month, depending on the community. My credit score is 710, so I'm hoping I can get approved for at least $200K and use $50K as a down payment, for a total budget of $250K.
My question is: is it worth it to buy a condo in this market or should I wait it out? I'm currently living with my family. I see the condo as a place to live and not an investment. I'll save a lot more owning a condo and get more space vs. the outrageous apartment rents.
Waiting it out assumes a price drop, which I don't think anyone can predict. In general real estate prices go up over time. If you can buy a condo as a place to live I think you should.
If you plan on being there for a while, here are some facts. Nobody can predict the price in 3, 6 or a year but
1. Inflation is going to go through the roof. Meaning $1 today might be worth $.90 in one year. Your $250k condo will continue to go up in value to $275k just on inflation.
2. Interest rates are at all time lows. You will probably never see interest rates this low ever again. If rates jump up 1 or 2 points you might be paying $200 - $500 more a month just to cover the rates.
3. Housing prices are the most expensive in May - July (volume up due to people moving before school year starts), the months of September is a cooling off month for the market.
Its actually a great time to buy (in my opinion) as I don't believe it will be getting cheaper anytime in the foreseeable future.
I agree that rates will go up, not down. Buy now, and pay attention to quality and location, and what percent of renters are allowed. Be sure to read the covenants carefully, so you understand and agree with what your condo fees will cover.
Waiting it out assumes a price drop, which I don't think anyone can predict. In general real estate prices go up over time. If you can buy a condo as a place to live I think you should.
Yep. People have been waiting it out for 10 years. Will there be a bubble burst? Yeah, is it going to be a 15% drop? I wouldn't hold my breath.
Do a little research on water issues in Las Vegas. I live there and people still keep coming — and its a great place to live! I have confidence we will overcome the water crisis, but it still is a good idea to educate yourself about this problem.
As you want it primarily as a home, if you can afford it and you like it, buy it. Chances are you will probably make on the deal as well should you decide to sell. Agree with comments about the unlikelihood of prices declining significantly and the high probability of interest rates rising sometime (although people have been saying that for the last couple of years and it hasn't really gone anywhere, so who knows, but they can't go much lower at this point). If you can afford to do it now, do it now.
You might also want to look at a 2 bed/2 ba house, as a well-located SFH will generally appreciate more than a condo because of the underlying value of the land, and you may not have to deal with HOAs. Of course, you may not get the same amenities as in a condo, but it's worth considering.
Also, no personal income tax in Nevada for me would tilt things significantly towards Las Vegas cf Phoenix. Both of them are going to have to wrestle with water issues.
OP~
Since you have a "home-based" business, you might investigate your proposed internet speeds, when you start choosing candidate locations.
Also, if you're looking at condo's, you might check out the HOA covenants for running a biz out of your home. If there's any "shipping/receiving" activity, that may be cause for concern.
Lastly. your credit score cold use some help. While 710 isn't horrible, you're still 50 points away from prime. Do what you have to do to get that number >760. There are sites and programs to assist you in this.
Good luck!
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