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Is it just your time to buy?

Posted by Scott Van Voorhis March 6, 2014 11:17 AM

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I get a kick out of people who think they can time the real estate market and buy and sell at precisely the most advantageous time.

Really? Then maybe it's time to quit the day job.

Buying and selling a house is not like buying and selling stocks, with lots of factors that make for an emotional and complex decision making process.

Why do people buy or sell?

Maybe they are planning to have kids and want to "settle down" in neighborhood or town with a decent school system. Or maybe they've hit retirement age and can't deal with another New England winter, to name two big life changers that prompt people to act.

Too often, it's a divorce.

Really, there are a thousand and one reasons.

If you are lucky, prices are falling when it's time to buy and soaring when you want to sell.

Given what we've seen in Greater Boston over the past few decades, the latter is more likely.

But unless you are willing to wait it out for five, who knows, ten years - with no guarantee that conditions will be more favorable in the future - the real estate market you are in is the one you are going to have to deal with.

You've been dealt a set of cards and it's up to you to play them wisely.

All this brings me to a South End couple who has been getting all sorts of grief from the armchair quarterbacks on the comment board of this blog over plans to buy a condo in the neighborhood.

Icpshootyz and his wife both work in health care (doctors maybe?), make decent money and, after a decade of renting, want to buy, despite the "insane market."

While they may move to the suburbs after they have kids, the couple plans to rent out their South End condo in hopes of bringing in $4,500 a month and covering the mortgage.

"It's just our time to buy," he writes.

Here's what icpshootyz had to say to one of of the more persistent critics on the comment board.

I liked his reply.

NLB - hate to be a pain, but basically it sounds like your advice is to never buy. There is basically a downside to buying at ANY possible point in time. To me, the reason we are buying is not like the reason to buy a stock or mutual fund. We are buying because we have established our selves in our careers, we have no more intention to move anywhere, financially buying > renting in Boston (right now, can't predict the future), we are close to family and friends, and we love the city. Plenty of our decision making is not based on financial wizardry - it's just our time to buy. We're not going to keep renting for thousands and thousands a month just on the off chance that prices drop. We're ready to buy.

Market timing doesn't work all that well on Wall Street. And it doesn't work for the average home buyer or seller either.

My wife Karen and I started looking at houses in 2000 and wound up buying in 2002, when prices started to take off and the pickings were already starting to get very, very slim.

After renting, we were ready to start a family and were looking for something under $300,000, which we found with a class fixer-upper near Natick center.

Yes, I did look back and question why we didn't buy in 2000, when prices were appreciably lower, or even in 2001, when there was a sudden lull in the market after 9/11.

We would up paying more for less two years later.

But if we had waited for the market to cool off, well we would have been in for a very long wait, another five to six years at least.

Meanwhile, our rent was going up in our nice but small Quincy apartment.

The one thing we did right - we stuck to a budget, under $300,000, and avoided getting buried under a mortgage we couldn't afford.

In fact, we had capacity five years later to do a major revamp and renovation to our house, making it a house our kids can comfortably grow up in and that Karen and I can retire in.

That's my take. What's yours?

This blog is not written or edited by or the Boston Globe.
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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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