Should I still buy a condo given the election result?
November 9, 2016 1:36 PM Subscribe
I am supposed to close on my first home next week. With the election results being what they are, I've completely lost confidence in the wisdom of buying a home at this time. Am I better off waiting with this much uncertainty ahead?
My financial situation is secure and I can afford the mortgage (as well as the hit I'd take if I pulled out now), but I would feel like a chump if the housing market collapsed and I bought at the exactly wrong time. The condo is located in Irvine, CA if that's a factor.
My financial situation is secure and I can afford the mortgage (as well as the hit I'd take if I pulled out now), but I would feel like a chump if the housing market collapsed and I bought at the exactly wrong time. The condo is located in Irvine, CA if that's a factor.
One thing to consider is that, should you lose your job, it is considerably harder to kick you out of a condo you own than an apartment you rent.
posted by ignignokt at 1:45 PM on November 9, 2016 [5 favorites]
posted by ignignokt at 1:45 PM on November 9, 2016 [5 favorites]
Odds are, if this purchase made sense to you last week, it still makes sense to you next week. Especially if it's a permanent residence and not an investment that you counted on being able to flip down the road.
Beyond that, calling the market like this is almost impossible. Some people win big by taking a guess and shorting, but they're always professional investors with big hedges to fall back on if the gamble doesn't pay off.
Sure, maybe the value of real estate in your area tanks after you sign, and you're screwed in the sense that you end up paying more than you strictly needed to. But maybe your area ends up being a desirable safe haven that people want to escape to, driving the demand up. Maybe real estate values do crash, but they recover by the time you sell ten years from now. Or maybe you never intend to sell to begin with.
posted by tobascodagama at 1:56 PM on November 9, 2016 [13 favorites]
Beyond that, calling the market like this is almost impossible. Some people win big by taking a guess and shorting, but they're always professional investors with big hedges to fall back on if the gamble doesn't pay off.
Sure, maybe the value of real estate in your area tanks after you sign, and you're screwed in the sense that you end up paying more than you strictly needed to. But maybe your area ends up being a desirable safe haven that people want to escape to, driving the demand up. Maybe real estate values do crash, but they recover by the time you sell ten years from now. Or maybe you never intend to sell to begin with.
posted by tobascodagama at 1:56 PM on November 9, 2016 [13 favorites]
One point to consider is interest rates. They will start cranking up soon, probably in December. The yield on the 10yr note, to which mortgage rates are tied, was up to over 2% today.
Money will get more expensive from here.
posted by jtexman1 at 2:27 PM on November 9, 2016 [6 favorites]
Money will get more expensive from here.
posted by jtexman1 at 2:27 PM on November 9, 2016 [6 favorites]
I think you're fine in SoCal. Half the country is trying to figure out how to move to a blue state right now.
posted by fshgrl at 3:11 PM on November 9, 2016 [5 favorites]
posted by fshgrl at 3:11 PM on November 9, 2016 [5 favorites]
California has minimal recourse for lenders, so you're better off buying in CA than most places if it all goes bad for you.
posted by aramaic at 5:19 PM on November 9, 2016 [1 favorite]
posted by aramaic at 5:19 PM on November 9, 2016 [1 favorite]
Consider how secure your job and salary are - do you have strong job security and plenty of room in your budget to make the mortgage payment every month with money to save for long-term? The interest rates right now are strongly in your favor.
Do you plan to stay in Irvine long term and in this particular condo long term, or is this more a starter home you would want to move on from in 5-10 years? Is there a bigger-than-small chance you would move out of the area in 5-10 years?
Are you buying a home primarily to own a home, or to have an investment property?
If you plan to stay medium to long term and you have room in your budget to safely afford the mortgage with your secure-job salary, then you could make it through a downturn. It would suck to have your home depreciate, but you would be ok continuing to make the payments.
Perhaps research the fluctuations in housing prices in Irvine during the Great Recession. Some places stayed pretty even during that downtown - these would be good bets.
posted by sallybrown at 5:21 PM on November 9, 2016
Do you plan to stay in Irvine long term and in this particular condo long term, or is this more a starter home you would want to move on from in 5-10 years? Is there a bigger-than-small chance you would move out of the area in 5-10 years?
Are you buying a home primarily to own a home, or to have an investment property?
If you plan to stay medium to long term and you have room in your budget to safely afford the mortgage with your secure-job salary, then you could make it through a downturn. It would suck to have your home depreciate, but you would be ok continuing to make the payments.
Perhaps research the fluctuations in housing prices in Irvine during the Great Recession. Some places stayed pretty even during that downtown - these would be good bets.
posted by sallybrown at 5:21 PM on November 9, 2016
Response by poster: Well, my partner lost his job today. So, uh, the question has become moot. Thanks for the advice anyway.
Fuck.
posted by BuddhaInABucket at 6:45 PM on November 9, 2016
Fuck.
posted by BuddhaInABucket at 6:45 PM on November 9, 2016
:(
posted by tobascodagama at 7:37 PM on November 9, 2016
posted by tobascodagama at 7:37 PM on November 9, 2016
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But nobody really knows what's going to happen. I guess ultimately it depends on what you think is going to happen, your tolerance for risk, and just how secure your financial situation is.
And since you're already this deep in, do you really want to lose your deposit?
posted by Naberius at 1:40 PM on November 9, 2016