Buying a home during the nightmare that is 2022
February 21, 2022 2:44 PM
I am relocating from Phoenix to Columbus, OH (ironically, I initially made the decision to leave because Phoenix's housing market is so out of control that even with a great gig, no debt and more than a 20% down payment, I was being constantly outbid). Now, Columbus is the hot market due to the announcement that Intel is coming to town and I find myself in the exact same position all over again.
I know I'm not the only one in this position and I really feel for young families and first-time homebuyers. But back to me: I'm single, 50ish, no kids and all I really want is a small two bedroom house or condo and I'm just at a loss. All indicators are that it will be worse next year but I am leaning toward renting this year, putting some money in the market and then trying to grow my down payment even more that way. So ... should I wait? I was really hoping not to have to move twice in two years if I can helpf it. Bonus points if you have any experience with the Columbus market.
I know I'm not the only one in this position and I really feel for young families and first-time homebuyers. But back to me: I'm single, 50ish, no kids and all I really want is a small two bedroom house or condo and I'm just at a loss. All indicators are that it will be worse next year but I am leaning toward renting this year, putting some money in the market and then trying to grow my down payment even more that way. So ... should I wait? I was really hoping not to have to move twice in two years if I can helpf it. Bonus points if you have any experience with the Columbus market.
I've never lived in Columbus for more than a few weeks at a time and don't live there now, but I've co-owned a home there a few years ago. Lacey Wheeler at Red 1 Realty might be worth a call. I was really impressed by her when visiting small condos in the south - German Village, Brewery District - several years ago. (No idea if you should wait. Best of luck!)
posted by eotvos at 5:34 PM on February 21, 2022
posted by eotvos at 5:34 PM on February 21, 2022
Look at places to rent - and then try and track down the landlord and see if you can negotiate an option to buy the property as part of the deal.
Depending on the landlord's tax circumstances, you may be able to sweeten your position by offering to pay a higher rent and a lower price or a higher price and lower rent.
posted by Barbara Spitzer at 5:49 PM on February 21, 2022
Depending on the landlord's tax circumstances, you may be able to sweeten your position by offering to pay a higher rent and a lower price or a higher price and lower rent.
posted by Barbara Spitzer at 5:49 PM on February 21, 2022
No idea about your specific market but, if you can buy now, do it. You'd have to do spectacularly well at investing your money to outpace the stupid growth in housing prices everywhere. Even if you end up paying more than you'd like, you'll still pay less than you would in a year.
There is, of course, some small risk that the market will go down during the next year, but it's incredibly unlikely and may plateau a bit at most. If you're buying with a view to being a long-term owner, the market doesn't matter so much anyway and agonising over whether you'll do better if you wait (while throwing away a year of rent - don't forget to include that cost in your calculations) doesn't make sense.
posted by dg at 6:36 PM on February 21, 2022
There is, of course, some small risk that the market will go down during the next year, but it's incredibly unlikely and may plateau a bit at most. If you're buying with a view to being a long-term owner, the market doesn't matter so much anyway and agonising over whether you'll do better if you wait (while throwing away a year of rent - don't forget to include that cost in your calculations) doesn't make sense.
posted by dg at 6:36 PM on February 21, 2022
I am leaning toward renting this year, putting some money in the market and then trying to grow my down payment even more that way
If you mean putting money into the stockmarket in some way (including index funds) then this is a risky strategy. You put money in the market to grow it over the long term and this has previously worked well, but in the short term the market is volatile, and making money depends a lot on timing. You're also looking to beat a strong housing market. It would be less risky to buy what you can afford now, assuming that you can afford somewhere that's acceptable to you to live.
posted by plonkee at 5:24 AM on February 22, 2022
If you mean putting money into the stockmarket in some way (including index funds) then this is a risky strategy. You put money in the market to grow it over the long term and this has previously worked well, but in the short term the market is volatile, and making money depends a lot on timing. You're also looking to beat a strong housing market. It would be less risky to buy what you can afford now, assuming that you can afford somewhere that's acceptable to you to live.
posted by plonkee at 5:24 AM on February 22, 2022
We bought in Grove City (15 mins southwest of downtown Columbus) mid-2020 and the market has only gotten worse. I think the rental market is actually worse than purchasing, though. Houses in my pretty undesirable neighborhood (well and septic, old) are being rented for about twice what they were a couple years ago by property management companies. They're still shitty old houses that have been cosmetically flipped.
You will have competition for buying here too (a friend just told us YESTERDAY about a 1930s house with 5 offers before the open house ended, not a particularly hot zipcode), but I think you will be able to find something this year working with a good realtor.
posted by rawralphadawg at 6:22 AM on February 22, 2022
You will have competition for buying here too (a friend just told us YESTERDAY about a 1930s house with 5 offers before the open house ended, not a particularly hot zipcode), but I think you will be able to find something this year working with a good realtor.
posted by rawralphadawg at 6:22 AM on February 22, 2022
I bought 2 years ago in Columbus and the market was crazy then. The pandemic made it worse, and I suspect you're right that the Intel announcement is also adding another impact. The major problem is that there has been significantly less supply than demand, so the market is continuing on this trend of cash offers, well over asking price in a lot of areas. I suspect you will have a slightly easier time of it looking for condos rather than freestanding homes, because a lot of condo inventory has been added.
That said, rents have increased dramatically, and I think monthly rent could be up to twice what a mortgage is in some areas, so trying to make money during a year of renting doesn't seem likely. I don't have a realtor recommendation, but strongly suggest you talk to one here because they will have strategies.
posted by pixiecrinkle at 9:02 AM on February 22, 2022
That said, rents have increased dramatically, and I think monthly rent could be up to twice what a mortgage is in some areas, so trying to make money during a year of renting doesn't seem likely. I don't have a realtor recommendation, but strongly suggest you talk to one here because they will have strategies.
posted by pixiecrinkle at 9:02 AM on February 22, 2022
Thanks, All. I actually have a real estate agent (who's not doing a particularly good job for me). I'll be back in Columbus in late March and my company will pay for me to store my belongings. I think I'll do an AirBnB or something for a month or two and keep looking to buy. What a nightmare.
posted by simonelikenina at 1:30 PM on February 22, 2022
posted by simonelikenina at 1:30 PM on February 22, 2022
This thread is closed to new comments.
posted by damayanti at 3:36 PM on February 21, 2022