Author Topic: Should I buy a house/condo?  (Read 2042 times)

jr1029

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Should I buy a house/condo?
« on: December 17, 2014, 01:58:47 PM »
Hi  MMM people

I am trying to decide if it is time to move from renter, to homeowner. I'm single, late 30s, live in a relative high COL US metro area.
Through a recent inheritance and one time bonus from work (likely to never happen again!) , I have some cash and I need to decide if I want to buy something, or put into stocks (or another saving vehicle). I think I'd like to be a homeowner vs renter but it's not an all-consuming desire.  No pets though I would love space for a workshop (garage/basement).

Financial basics:
Pre-tax from (VERY secure) primary job - $98k
Irregular side gig - $12k this past year but I want to start working at it a bit less.
$80k 401k
$80k cash in checkings/savings/taxable stock account, of which I would consider ~ $65 could go towards downpayment (I want to keep a decent emergency fund)

NO debt at all
Paid off 2012 sedan which I plan to drive for the next 10 years
My rent is $1500 and I drive about 20 minutes to work. I can't bike due to a physical disability.

I qualify for an insane amount of mortgage - up to $450k it seems. I'm thinking more like the $350k-$375k range for small SFH / condo. I think PITI would run around $2000, maybe a tad more. Totally doable but I'd save less.

I do think I'll stay in this area for at least 5 years.
So... buy? Or stay a renter? And what do I do with the large chunk of cash in my savings account?

Thanks for any advice!


Zoot Allures

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Re: Should I buy a house/condo?
« Reply #1 on: December 17, 2014, 02:13:58 PM »
If you don't have a strong desire to own your own home, and if buying a house/condo would cause your housing cost to go up rather than down, then you're probably better off continuing to rent.

http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

TerriM

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Re: Should I buy a house/condo?
« Reply #2 on: December 17, 2014, 02:32:32 PM »
Housing prices may be high right now depending on which high COL area you're in.  I would go to Trulia or other realty sites and see if you can look at the market trends for your city over the last 10 years (More->Local Info->Market Trends).  If your city is higher than 2008 prices/peaks, I'd wait until it comes back down.  If your city is doing a slowpoke up (or even down), then now may be a fine time to buy.  In certain areas, the house prices drop when the stock market drops. so investing in the stock market and trying to take it out when housing goes down could be a wash.