There’s a little voice in my head that keeps telling me buying a house is a lot like jumping into a pool: you don’t know if the water is quite warm enough, but the other swimmers say it is, and you dip your foot in and it feels OK, maybe a little cool. But the only way to know for sure is to dive right in and find out for yourself.
Our first humble abode as a new Navy couple was in base housing. It was a 4-unit building, and we knew our neighbors upstairs and next door. The fourth unit was vacant—in fact, I think most of the rest of the street was vacant. We regularly got together with the other two couples to eat dinner or watch a movie. It was a GREAT experience.
But after the stress of the move-out inspection, we decided not to opt for military housing the next time. The fact that there was a 24-month waiting period played into our decision, too. So at our next duty station, we rented. We had a great house in a great location (10 minutes from the base!), but everyone kept telling us we were ‘throwing money away on rent.’
This was between 2003 and 2006, and everywhere we turned we heard friends telling us about how much the value of their home had gone up. One of our friends bought one condo to live in and another one to rent out. I knew several people in the community who were in the ‘house-flipping’ business.
Toward the end of our stay, we started hearing less cheerful chitchat: complaints about adjustable rate mortgages kicking in, difficulty finding buyers, etc. I’d like to be able to say I had foreseen the housing bubble and that that was why we stayed out of the property ownership game, but the truth is that I’m just scared—scared of home ownership.
The next time we moved, the writing was on the wall with regard to the housing bubble. There was no way we were going to buy. We rented again and listened to all the talk about foreclosures and we knew we’d made the right decision, even as we worried about those friends and fellow military families who did own homes.
But now the time has come to start thinking about our next PCS, and we’re asking ourselves that question again: to buy or not to buy? Will the market have bottomed out by the time we’re ready to move? How bad is this economic downturn we’re in?
Another Navy couple we’re good friends with recently purchased a home, and their story gives me hope that maybe we’ll be able to do it this time.
So what do all you homeowners out there have to say? How’s the water?
9 Comments
Well, I can tell you, I’m very anxious. I’m not sure how we will fare next PCS season. If we leave the area we are in, surely, we hope to sell. Of course, if we are not going to at least break even or profit a little, we may opt to rent it out. Still, that poses some problems as I’m not sure how I feel about being a landlord, not to mention one in another geographic area.
While we’ve never lived in housing, we have always chosen to live on the economy by way of rentals. Of course, I will say, that we’ve loved owning our home thus far. It’s been a learning experience. The beginning was tough, especially because we’ve made a lot of improvements to our home, so finacially that took a toll. Nevertheless, the sweat equity can be good and can help improve chances when the home goes on the market.
Good luck. It’s not an easy, overnight decision to become a home owner. What is right for one person may not be right for you. There is no one clear-cut answer when it comes to owning a home.
Oh my, that is a totally loaded question…we bought our first place at the height of the season and now are renting it out because we could not in our right minds sell.
And we just recently bought another home.
We love owning our own place. But it is a definite risk! Our bottom line question we have asked ourselves is, “can we afford the worst case scenario, ” and we have decided that if we can swing it, we will.
I wish you luck!
As I mentioned to you in person, after going through it, we don’t feel that it’s any riskier than renting; the risks are just different. It’s a fantastic time to be a first-time buyer (especially in your likely market) who doesn’t have to worry about being on the sale side of a transaction. As long as you put some money down on a place up front, get a fixed-rate loan from a reputable lender like NavyFed or USAA and stay well within your means (don’t borrow as much as the banks will loan you, even if you’re 100% certain that promotion is coming next year), the current problems in the mortgage market simply won’t apply to you.
If I remember correctly, you were hoping to move to the Everett area? We bought a home a couple years ago while stationed in Bremerton, WA, and have been renting it out for the last 2 years. Don’t quote me on this, but I don’t think the Seattle-Bremerton area was as hard hit by the market slump. Our house has actually appreciated every year by 5-10% when everyone else was saying their home prices were bottoming out. So, if this is a trend on more than just our little block, it might be that buying a home in that area isn’t quite the steal as in other parts of the country. We are currently living in San Diego and after a LONG debate, decided to rent instead of buy, even though we’ll be here 3 years. This was a crazy market, and even with lower prices, it’s still $$$$ unless you are over 40 minutes away from base. (we’re 15, and right within our Navy stipend, and in a funky fun neighborhood to boot.)
If you do plan to buy, make sure to get a fixed mortage. Adjustable arms are evil.
We are in the same boat. I’ve done tons of research and it comes down to the market where you want to buy, whether you are capable of becoming a landlord in case your home value drops or/and you cannot sell…also you have to factor in how much money you will be dishing out for interest (almost 90% of your mortgage payment depending on your rate), homeowner’s insurance, closing costs/fees, and HOA dues (if applicable). Is owning a home something you want to do, or an investment you hope to come out ahead with? Renting a home is substantially less than owning one in most markets (but not all). The hubby and I have been stationed in the Keys for 3yrs now and have paid $1400 monthly in rent, if we would have owned a property (a cheap one) we would have paid around $2500 monthly…we decided to invest the difference between our rent and our “possible mortgage payment” and we’ve definitely come out WAY ahead on that investment than we would have if we dished out all that money in interest, insurance, closing costs, and depreciating value. Use one of those rent vs. buy calculators to see if owning a home in the market where you’ll be stationed will benefit you or if renting will benefit you. If you don’t care to come out ahead on a home purchase, then you can always look forward to increasing your credit, I guess. That’s the only positive thing I see coming out of owning a home and not coming out ahead, but hopefully you’d at least break even if you don’t build up enough equity to cover your interest & taxes (minus the tax advantages–you don’t get all of that back), insurance, closing costs, and any HOA fees. Sometimes I wonder who came up with that analogy where renting is throwing your money away, because owning is crazy expensive if your home doesn’t build enough equity by the time you sell and even if it did, then there’s the inflation issue you have to factor in…if your home rises in value, so do all the others.
hm…..we are on our 4th home ownership….while I harbored the same fears you do, when we stepped into the mortgage a couple months ago, I will say that all in all our home owner experience has not been bad….we have never had a hard time selling our home, in fact we have not used realtors….instead selling it ourselves to reap the benefit of saving our profit and not giving it away….
Who knows at this point what our life holds, we may retire here, we may move on to a new assignment, but in the end I have to say, I too, love owning my own house, even with all the naysayers saying DON’T BUY, you will regret it, I hardly regret any decision made with advance forethought.
Good Luck,
~A Soldier’s Wife
Just to add…I really think it all depends on the market where you want to buy. A lot of markets are doing just fine and others are doing horribly…just do your homework and you should be fine.
My mother purchased a home in Southern California in 2005 and has already lost $100k in value and we’ve known a few people who purchased homes in the Florida Keys and have also lost around $100k in value since 2006. I think CA and FL have some of the worst markets right now though. But I’m sure if you did some research, it would help you feel more comfortable with your decision.
I wouldn’t buy a house now. We live on base. Just moved into our little abode in Alamogordo, New Mexico. The housing was built in the 1950s. We just signed a waver and accepted that our home has both aspestos and lead paint. And I’m STILL happy to be here rather than having the stress of owning a home (we’re currently renting out our house in Yorktown, VA…the home we were supposed to occupy for at least three years and sunk vast amounts of money into and then were told we’d have to move after only five months…).
As you can tell, I’m not down with home ownership right now. Dealing with a landlord sucks, but if you go on to militarybyowner.com you might be able to rent from a military family, and that tends to be infinitely better than dealing with a property manager.
These are all great comments. Thankfully, I have time to do the research and keep an eye on the housing market. According to all the economic news, it’s probably going to be a buyer’s market well into next year, or even 2010.
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