Thursday, May 19, 2011

Priced out forever

Given all the ink all over the internet about home buying and the risks and rewards of buying is the current market, I've been thinking about my decision to buy a home right at the height of the housing bubble.  I like most people looking to own a home in that time frame that we needed to buy or we would never be able to afford anything.  We where afraid of being priced out forever.  We closed on our home purchase in December of 2008 after looking for about 4 months.  The home had most of what we want and while a little above what we wanted to pay it had come down almost $50k from the original list.  We paid $299k for a 1500 sqft newly constructed townhouse close to where we wanted to live.  In the time since we have bought I have started to regret the decision and started reading the Seattle Bubble blogGet Rich Slowly, and The Simple Dollar all of which advocated not buying in the time that I was considering buying.  All things considered I like where we live and the people that we live around, but given the houses that my friends have bought since the market has taken a turn I know my money could have gone further.  As it sits the Zestimate for my home is about $70k less than what I paid for it, and even that is likely high (given there are a few short sales in the complex).

In the moment that we where considering buying we where nowhere near ready, mentally or financially; and in a traditional not hyper inflated (and not dangerously/fraudulently loose lending situation) we likely would not have qualified for a loan on our home.  We have been fortunate to not even be considered for layoffs in our positions, and have not had any difficulty maintaining our payment schedule, all the while significantly reducing our consumer debt load.  We overbought, but altered our lifestyle enough to sustain it, and with the advice of Get Rich Slowly have gone from nearly $50k in unsecured consumer debt to about $11k and worked steadily to pay our mortgage more quickly with the equity accelerator.  If you find yourself in debt, look at the Get Rich Slowly blog, work that system.  The first step to correcting a problem is to acknowledge you have one, and change your lifestyle accordingly.

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