Are we seeing the return of the buy-now-at-any-cost mentality?
Buyers scrambling to get into the market, fearful of getting priced out should they wait any longer, helped push the real estate market over the cliff during the bubble years.
And as the the spring market approaches, buyers in early 2014 now find themselves facing similar pressures, this time not just from soaring prices, but also from rising interest rates.
Here's a pretty revealing note posted on the comment board of this blog from a buyer who works in Boston's burgeoning health care sector along with his wife. While the couple plans on eventually moving to the suburbs when they have children, they are going ahead with plans to buy anyway, despite an "insane market."
As for the condo, they will rent it out after the kids start to arrive and time to move comes.
Writes icpshootzy: "Even if Boston condo prices do fall, we have zero intention of selling, possibly ever. Part of the reason we are buying a condo in Boston proper is to enjoy it now, rent it out if/when we move to the suburbs to raise a family, and potentially move back to it when the kids are moved out."
"This is not a short term purchase, this is a "forever" purchase," he adds later.
Seems like a great idea, until you look out five or ten years after thousands of new apartments open up across Boston.
Here's more from icpshootzy:
'I'm in the process of buying in this insane market, and in the long term it will probably make sense. With what it costs me to rent in Boston right now it makes no sense not to put that money towards a mortgage instead. And given that my wife and I have stable jobs in healthcare, the risk of having to move anywhere is almost nil, so we plan on keeping this condo for the long haul. Yes, these prices are ridiculous, but that's because people are willing to pay them. The seller's didn't come up with these asking prices out of no where. If you want to live in a desirable area right now it's going to cost you, end of story. Until that demand goes down, that's how it goes. We're getting in at the highest price ever paid for our unit for sure, but at a reasonable interest rate at least, and with 20% down. If we tried to wait out the market we'd A) have to pay a large amount of money in rent that we will definitely never get back and B) risk interest rates going way up. We know we're not going anywhere, so owning even at high prices makes more sense for us."
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