In this economy how long to stay in home? (6%, investments, mortgage rates)
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Just bought a house last week - moved in over the weekend. We plan on staying in the home 5 years or so. Is that enough in today's economy? When we were in the process of buying it we felt good about that time frame but am curious what people think.
Its a brand new home in a nice family oriented town in Central Mass so we figured it was a great choice based on proximity to work and the fact that it was brand new and was move in ready.
Just bought a house last week - moved in over the weekend. We plan on staying in the home 5 years or so. Is that enough in today's economy? When we were in the process of buying it we felt good about that time frame but am curious what people think.
Its a brand new home in a nice family oriented town in Central Mass so we figured it was a great choice based on proximity to work and the fact that it was brand new and was move in ready.
Thanks for the thoughts.
Is it in a development where they are still building new homes? If the economy is affecting the builder to where he is slowing down new construction, it might be hard five years down the line to sell if you are competing with new homes.
In most cases a desirable neighborhood without a high number of distressed homes will tend to hold value over time and back in normal markets (if such a thing ever existed) you would expect to see some appreciation.
For years the 5-year time frame was when I tended to move on to another home. The environment that I existed in was one of declining interest rates, so my choice was often refi or sell/buy.
I lived in central Mass years ago; Leominster Ma. when I worked for Digital Equipment. I'm sure it has changed a lot, but it did not seem likely that the population would grow rapidly. Point being; I don't think you should count on a lot of appreciation over the next 5 years unless there is some economic reason that people are drawn to the area, or the Boston metro area has expanded to the center of the state.
That said, first subtract the 6%+ that you're going to have to pay for realtors, lawyers, title, etc. Now consider that the market can't make that 6%+ until it stops falling. And, at historic appreciation rates, 6% would take two years to accrue.
Don't know how long it will take for the market to stop falling.
Don't know if we'll have historic appreciation rates afterwards.
Then again, inflation could kick in and you'd be fine.
Then again, high mortgage rates could kick in and potentially push prices lower.
Then again.....crystal ball.
You took your best guess. Don't look back. If it doesn't work out, don't blame yourself. NOBODY, including the Nobel Prize and top government guys, seems to be able to call this thing. So why should you hold yourself to some impossible standard?
Just bought a house last week - moved in over the weekend. We plan on staying in the home 5 years or so. Is that enough in today's economy? When we were in the process of buying it we felt good about that time frame but am curious what people think.
Its a brand new home in a nice family oriented town in Central Mass so we figured it was a great choice based on proximity to work and the fact that it was brand new and was move in ready.
Thanks for the thoughts.
Think of your house like a car. A car depreciates in value and it depreciates faster the more miles it has on it and if it isn't maintained. According to Peter Schiff in his book CRASH PROOF, for too long we have been thinking of our homes as investements -- which according to him are just alternatives to rentals and should NOT be thought of as investments. Perhaps a house should maintain its original value (what you paid for it) IF you maintain it. I think though, that it is fair to say, if you don't update it before you sell it, you shouldn't expect to get much more than what you paid for it.
I put a boatload ofit money into my house to spiff it up with a brand new state of the art upscale kitchen and appliances; new hardwood floors; crown moldings; updated bathrooms and more and even then I underpriced it just to sell it back in mid 2007. I did get a lot more than I paid for it in 1988 but I also did a lot of work on it geared towards what buyers look for these days.
Don't expect to make a killing selling your house in 5 years if all you do to get it ready to sell is replace the kitchen and bathroom faucets. In fact, I bought my house at the top of the real estate market in the 80's and it dropped in value after i bought it (brand new construction) and it took 12 years for the market to rebound and for the house to be worth what I paid for it. It was the 6 years after that when the bubble was inflating AND all the work I'd done to it that helped me sell it in what was again a buyers market with property values beginning to decline in 2007.
NOBODY, including the Nobel Prize and top government guys, seems to be able to call this thing. So why should you hold yourself to some impossible standard?
Good luck!
Buy low, or at least SMART. Maintain appropriately. Hope for the best. If you HAVE to sell in 5 years at least enjoy the time in it, if you decide to stay longer, do things that will make those 5 years as pleasant as possible.
You took your best guess. Don't look back. If it doesn't work out, don't blame yourself. NOBODY, including the Nobel Prize and top government guys, seems to be able to call this thing. So why should you hold yourself to some impossible standard? Good luck!
I like the way you framed this, cohdane.
No one knows what the stock market will do on Monday or if we are at the cusp of another bull run or if it's just a blip.
Only thing most can agree on, is that all markets eventually recover and we all have to pay to live somewhere.
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