Baby Fever and the Cost of Housing

Well, my wife has now been having contractions on and off since Saturday. She and I are walking around like cats on hot tin roofs! When will this baby come?

Waiting is one of those things. It can be hard to do it gracefully. Take the waiting game on the housing price decline. I've seen the frequency of predictions of this decline increase since sometime back in early 2005. We're stilll waiting. While the experts will be quick to shout "I told you so" when it actually happens, the fact is: no one knows for sure when it will happen, and whether it will be a big disturbance (think new child in the house) or small disturbance (think new pet in the house) is anyone's guess.

In the meantime, some folks have put their lives on hold. They are waiting for the housing market to fall before they buy. Should you? What if the market still hasn't fallen by 2007 and you are still waiting? Would that be okay? Or do you want to get into the market and start paying down a mortgage instead of paying rent?

I suppose there are many things where putting your life on hold doesn't necessarily make sense. If you feel ready to get into the market, then look for a place to buy. Buy smart and within your price range. Be sure your payments are manageable. And consider this: I bought my first home at the height of one market and the beginning of a downturn in the early 90's. For several years, I woefully looked at the size of my mortgage versus the value of my home and felt genuinely ripped off. But there is a happy ending to that story! When I finally sold my home about 12 years later, I actually made a small profit on it and was able to put a nice size downpayment on our current place.

The moral of our story? Housing is still a good investment, if you are willing to hold it long enough. And guessing the market can be a crazy-making game, where the only person who loses out is you.

Michael

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