Is it the right time to buy a house? (Here’s what you need to know.)
In the 24 years we’ve lived together, my wife and I have purchased a co-op in the New York area, a condo in that same market, four homes in Connecticut, a vacation condo in West Palm Beach, Florida , a luxurious condo in a West Palm high-rise, a manufactured home near Disney, and most recently, a resort condo that’s also just outside of Walt Disney World.
Currently we live in a rental townhouse because we needed more space during the pandemic and basically cashed in on our residence so we could purchase our vacation/investment property mortgage free. Now that our son has graduated from high school, it’s time to buy a new house.
We have experience, but we’ve never seen a housing market where listings are contracted before we’ve even read the emails that say they’re on the market. And while South Florida may be particularly hot as a real estate market, it’s not atypical. Many of the issues we face will be similar to those everyone faces.
How do you decide where to live?
Your budget plays a pretty big role in where you plan to live. My wife and I considered two very different budgets about $100,000 from each other. We would be willing to spend the highest amount if we could fit our needs – a townhouse or single family home, not a condo in an apartment building – in roughly the part of South Florida we currently live in .
If we couldn’t find that, we planned to spend the lower amount and travel either about half an hour north, but still on the coast, or to central Florida, where the prices are much lower than those in South Florida.
We needed three bedrooms, we wanted four, but we were willing to settle for three with space that could be used as an office. Our real estate agent – a long time friend who has worked on several transactions with us – noted what we wanted and started sending us ads.
It soon became apparent that what we wanted at the top of our budget only existed in theory. Listings appeared, but disappeared before we could see them, and one was under contract while we searched.
If we wanted to stay exactly where we currently live, we would need to spend more money, have less space, or live somewhere that would require a lot of work. This made our decision part quite easy and we shifted our focus about 45 minutes up I-95 to the Port St. Lucie area.
What is buying a home in a hot market like?
My wife and I also own a resort property, a two bedroom condo, near Disney World. When we bought this, we had identified the resort we wanted to own and started bidding – blindly. We were cash buyers and still lost on several properties we bid on before finally landing a condo that we are happy with as a rental/vacation home.
We didn’t expect the same to happen when buying a new primary residence, but that’s exactly what happened.
Once we started looking north of where we lived, in a section of Port St. Lucie called Tradition, we started following the listings. We went to see a few before bidding on a three-bedroom single-family home that needed pretty much a complete interior renovation.
We made a quick offer slightly below the request, which we raised at the request of the listing agent. Maybe we were lucky or more likely we were used to upping the bid from the cash bidder who eventually bought the property.
Meanwhile, a similar home has come up for sale in the same community for a lower price of $30,000. Based on some very vague photos, we offered $20,000 more than asked, and within about 36 hours we were under contract to buy a house – a pretty big purchase – without actually seeing it.
It’s a bit atypical, but knowing that we’ll probably have to do it all over again anyway (we absolutely do), it felt less risky and really the only way to get a property in today’s market.
As a buyer in a warm market, we also knew we had very little leverage and made sure our offer reflected that. In addition to exceeding the asking price and making the offer without seeing the property, we:
- Agreed to cover any difference between the valuation and the agreed price.
- Essentially taken the house “as is”
- Took a tenant who has 90 days to vacate
- Agreed to manage the title (which the seller normally does)
If we hadn’t done all of these things, the seller would most likely have withheld our offer and waited to see if something else came along. With houses under contract within hours, our realtor felt that being aggressive was our best angle, so that’s how we played it.
And finally, while our new pending house (which we finally saw during the inspection) contained a lot more cat pee than we had hoped, it will eventually – after tearing up the carpet and painting everything – to be a house that we can live in for a long time.
So, is it the right time to buy a house?
It’s clearly a seller’s market, which makes things very difficult for buyers. Buying a home right now – at least in areas where real estate markets are hot, which is most places – takes creativity and preparation.
You have to know what you want and, on occasion, be prepared to take frightening leaps of faith. The problem is that while now might not be the time to move just because you want to, many people buy a home because they need a place to live and fear that prices will continue to rise. increase, which will eventually exclude them from the market.
This is exactly where we were. We live in an expensive rental and wanted to stay at least somewhat close to family in South Florida. It wasn’t the perfect time to buy, but we think our new home will look like a bargain in a few years.