Sold House Right Before COVID - Keep Renting or Buy

[rmorris50]

So I am in a unique position that I am sitting on a bunch of cash due to the sale of my house and having relocated. I'm interest in peoples' thoughts if they would wait to buy or just jump in like I was planning to do.

In Nov 2019 my job in NYC was eliminated and I was packaged out. I kinda saw this coming so was already interviewing and luckily landed a job a couple of weeks later with a start date in Jan 2020 in Charlotte, NC. So my spouse and I sold our NY house in Jan (it was quick, hot market), and I grabbed a short term furnished rental until August in Charlotte, thinking we'd buy a house by then. My spouse for career reasons got an apt in NYC and will continue to work there the remainder of this year and then move to Charlotte.

The Charlotte real estate market still seems hot, prices have not really moved yet because of this crises. There are a lot of personal reasons I'd want to still get a house now:

- I'm paying for storage with movers until I buy
- Want a house with a yard for the two dogs (we don't have kids and don't plan to)
- Want space for my Mom to come live with us, and would like an office and small workout room.
- We plan to be on Charlotte for about 10 years until we are both retired and then move to FL.
- Interest rates are very low, I can get 3% no points
- Don't know how easy or hard it will be to get financing and find the right how once things "open back up"

If prices drop 10%-15% ok. But I'll feel stupid if I buy now and the market totally tanks 30% or more.

Here is our financial situation:
Cash     $220K
Invested Retirement Accounts $1500k
Pension Balances $350k
Life Insurance $50k
No debt
Household income 350K annually

So from a lifestyle perspective I'd like us to be in a house, but the financial part of me maybe would just keep renting and wait. But I could end up in divorce if I push for that!

[desk_jockey]

My spouse for career reasons got an apt in NYC and will continue to work there the remainder of this year and then move to Charlotte.
…
We plan to be on Charlotte for about 10 years
…
If prices drop 10%-15% ok. But I'll feel stupid if I buy now and the market totally tanks 30% or more.
…
would just keep renting and wait. But I could end up in divorce if I push for that!
 

Extreme situations can happen in a specific city, but I’d be beyond shocked if the whole country’s housing market collapsed 30% because of this economic crisis.  Charlotte’s market should be relatively safe as the area has been growing for a while, and post COVID recovery will continue to grow.  The low interest rates will also help to prop up the housing values, as a large number of people buy based on the payments they can afford.

This year is having an unusual housing season, less homes on the market but also less people looking to move.  I expect next Mar-Jun to be very different.

Your post makes a justifiable case for buying.  In your situation that’s what I would do.  You don’t have to rush into things, take your time to find the perfect fit. In your situation in won’t make too much difference as to whether you buy in May or Dec.

[theoverlook]

I don't know about you, but any money I'm not planning on using I put into the market. If houses drop 30% in value then the market isn't going to be too far behind so any cash I have would take a 30% hit as well. I also think you're unlikely to see a 30% house value drop in desirable areas even with a general 30% value decline. I'd shop more on finding exactly what you want versus planning for any future dips.

[Wintergreen78]

I’d use this to run the rent vs buy numbers. https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

There have to be some houses with a yard for dogs that you can rent. Compare what they cost to rent to the actual cost of houses right now and see where you end up.

[LightStache]

I don't think the housing market is going to go drastically UP from now through this Fall. The market is highly seasonal and if you wait until late Fall, early Winter you could probably find some amazing deals. So I'd wait until then and pickup a good deal.