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Should I Buy My First Home Now?

3,794 Views | 26 Replies | Last: 4 yr ago by dubi
southernskies
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1:18p, 9/9/21

Currently in Ft Worth area, got outbid by at more than 5 times (even offering $30k over) when I was shopping back in April/May so we decided to rent for a year. Looking for homes $300k and under without going too far into the burbs - don't want to be in a cookie cutter neighborhood.

Current lease is up in May but I'm just not sure about this market. My gut tells me that it can't keep going up like this. My salary definitely ain't going up at the same rate. Now I'm debating renting another year - still plenty of time left to decide though.
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PlanoAg98
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1:48p, 9/9/21
AG
In order to not be in a cookie cutter neighborhood, you should look at older neighborhoods. Most neighborhoods being put up over the last 20 years have been cookie cutter.
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southernskies
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2:23p, 9/9/21
Yes definitely looking at older homes - we're not scared to put a a little sweat equity in it. We like the character of the older neighborhoods too.
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p_bubel
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2:25p, 9/9/21
I can't speak for Fort Worth, but I'm starting to see seller concessions return and a days on the market that' more reasonable/normal over the past couple of weeks. The nuttiness might be over here in San Antonio, for now. Maybe it's similar up there?
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Red Pear Realty
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3:40p, 9/9/21
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The market is definitely not as hot today as it was in April/May of this year. My guess is that if you were looking at $300k homes in April/May that were selling for $330k, today those same homes are being listed for $330k and selling for something like $320k while being on the market for a few days longer. This is on average. And if you don't have an agent, Red Pear Luke covers the DFW market and would love to help you (and get you a sweet 2% rebate).
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Beckdiesel03
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4:14p, 9/9/21
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I see the same patterns in the hill country as mentioned above. The last 2 months has " normalized" and it's just not a complete sh** show like it's been for the past year.
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Red Pear Luke
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4:27p, 9/9/21
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This market is super frustrating, especially at the $300K level as we move towards the quieter fall/winter seasons. But I'm confident there's some great deals out there for that first house before your lease expires in May.

Happy to help or even if you just want a second opinion to bounce ideas off. Give me a shout (214-785-1750) or check us out at MyRedPear.com!
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Red Pear Luke
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In reply to p_bubel • 4:34p, 9/9/21
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p_bubel said:
I can't speak for Fort Worth, but I'm starting to see seller concessions return and a days on the market that' more reasonable/normal over the past couple of weeks. The nuttiness might be over here in San Antonio, for now. Maybe it's similar up there?


Funny enough Paul, there's been a few houses in my in-laws neighborhood near the Hyatt Hill Country Resort off 151 that are going under contract within 24-48 hours of listing and are selling at 5-7%ish over ask. It feels like a Dr. Jeckyl and Mr. Hyde market sometimes and neighborhood by neighborhood.
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PlanoAg98
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6:40p, 9/9/21
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https://www.zillow.com/homedetails/7111-Glen-Hills-Rd-Richland-Hills-TX-76118/29182361_zpid/

My searches on Zillow while looking for my house were > 0.5 acres, 1 story, & pool. Here's the same search but in Fort Worth and resulted in this one in North Richland Hills that looks pretty nice.
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p_bubel
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In reply to Red Pear Luke • 9:53p, 9/9/21
Red Pear Luke said:
p_bubel said:
I can't speak for Fort Worth, but I'm starting to see seller concessions return and a days on the market that' more reasonable/normal over the past couple of weeks. The nuttiness might be over here in San Antonio, for now. Maybe it's similar up there?


Funny enough Paul, there's been a few houses in my in-laws neighborhood near the Hyatt Hill Country Resort off 151 that are going under contract within 24-48 hours of listing and are selling at 5-7%ish over ask. It feels like a Dr. Jeckyl and Mr. Hyde market sometimes and neighborhood by neighborhood.


Price point by price point too.
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agsalaska
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10:30p, 9/9/21
AG
Yes
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Buck Compton
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12:47a, 9/10/21
AG
This is also a natural time for demand to sag a bit. Kids just started school, fall sports are fully underway, and most families aren't trying to move unless forced to by jobs or something similar. Naturally, demand is lower so those price points and neighborhoods are not as crazy.

My gut says next spring and summer is going to be hectic again. Maybe not like this year, but it'll still be crazy.
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Red Pear Realty
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In reply to Buck Compton • 7:44a, 9/10/21
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Buck Compton said:
This is also a natural time for demand to sag a bit. Kids just started school, fall sports are fully underway, and most families aren't trying to move unless forced to by jobs or something similar. Naturally, demand is lower so those price points and neighborhoods are not as crazy.

My gut says next spring and summer is going to be hectic again. Maybe not like this year, but it'll still be crazy.


Same
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southernskies
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8:36a, 9/10/21
Is there any upside to buying right now vs renting another year to see what shakes out? My gut tells me that the bulk of the increases in home values have already hit. I don't foresee home values going parabolic but I do have a feeling that the market could see a correction after the Fed stops propping everything up and tax rates catch up to people that may have overspent.

I can't remember where I read the article, but I did read something on a growing number of millennials having buyers remorse on first time home buys. Apparently issues such as maintenance, space, and overpaying were some of the factors that these people feel differently about their home now.
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Furlock Bones
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In reply to southernskies • 10:11a, 9/10/21
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southernskies said:
Is there any upside to buying right now vs renting another year to see what shakes out? My gut tells me that the bulk of the increases in home values have already hit. I don't foresee home values going parabolic but I do have a feeling that the market could see a correction after the Fed stops propping everything up and tax rates catch up to people that may have overspent.

I can't remember where I read the article, but I did read something on a growing number of millennials having buyers remorse on first time home buys. Apparently issues such as maintenance, space, and overpaying were some of the factors that these people feel differently about their home now.
people talk about corrections all year every year. if you have the financial stability to purchase, then do it.
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Martin Q. Blank
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In reply to southernskies • 10:24a, 9/10/21
southernskies said:
Is there any upside to buying right now vs renting another year to see what shakes out?
I don't think the rental market has increased as much as home values. I haven't looked at numbers, but look at your rent vs. the potential interest, taxes, insurance, and maintenance you would be paying for the same house.
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Red Pear Realty
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In reply to Martin Q. Blank • 10:38a, 9/10/21
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Rents have popped like 20-25% ITL in Houston over the last 60-90 days. My houses that used to lease for $2,500 are now comping to $3,000. A lot of landlords haven't figured this out yet but yeah, the rental market is finally starting to catch up to price jumps.
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Furlock Bones
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In reply to Red Pear Realty • 11:07a, 9/10/21
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My buddy had a Rental bidding war for his Katy home. Ended at $4k/month with multiple months paid in advance.
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Red Pear Luke
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In reply to Red Pear Realty • 1:29p, 9/10/21
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Red Pear Realty said:
Rents have popped like 20-25% ITL in Houston over the last 60-90 days. My houses that used to lease for $2,500 are now comping to $3,000. A lot of landlords haven't figured this out yet but yeah, the rental market is finally starting to catch up to price jumps.


On the Multifamily side, I've seen deals go under app with agency loans that are running into issues where the loans were quoted based on certain affordability numbers based on rents. Then between time of signing the loan app and closing the loan, rents have grown so much that number of "affordable units" is reduced enough that the lenders are getting in trouble with the agency's for delivering lower than the originally proposed affordable units promised.
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Red Pear Realty
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In reply to Red Pear Luke • 1:36p, 9/10/21
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That's wild
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Red Pear Realty
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In reply to southernskies • 1:44p, 9/10/21
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southernskies said:
Is there any upside to buying right now vs renting another year to see what shakes out? My gut tells me that the bulk of the increases in home values have already hit. I don't foresee home values going parabolic but I do have a feeling that the market could see a correction after the Fed stops propping everything up and tax rates catch up to people that may have overspent.

I can't remember where I read the article, but I did read something on a growing number of millennials having buyers remorse on first time home buys. Apparently issues such as maintenance, space, and overpaying were some of the factors that these people feel differently about their home now.


Buy when you are ready. If you aren't a real estate investor, don't view your home as an investment. Don't buy if you plan to live there less than 5 years, and if it's your forever home, price doesn't matter because in 50 years the house will be worth 200 times what it is today, and your grandchildren will giggle that you only paid $350,000 because that's how much their first used car will cost. And yes, home ownership will cost you more than your monthly payment. I bought a house in 2019 for $425,000 and it's probably worth $525,000 to $550,000 today. But in the last month I've spent around $13,000 to replace an HVAC condenser, cut down a massive, dead 70 year old oak tree, and install a French drain system at my house. Do I regret buying? No. Should you be aware that those costs happen from time to time and you should budget for them? Most definitely.
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FlowCtlr
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3:45a, 9/11/21
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Living overseas now. When we repatriate, if the market is still like this we will be strongly considering renting. A lot of this is being fueled by fed manipulation (i.e. ultra low interest rates, mortgage purchases by Fannie and Freddy, etc). Bubble doesn't burst until they raise rates again. Which really might be never.
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Lynch
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In reply to PlanoAg98 • 11:23a, 9/11/21
PlanoAg98 said:
In order to not be in a cookie cutter neighborhood, you should look at older neighborhoods. Most neighborhoods being put up over the last 20 years have been cookie cutter.


Most neighborhoods put up since the 50s are cookie cutter, at least now they try and change elevations. That wasn't a thing from the 50s to 80s.
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MAS444
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In reply to Red Pear Realty • 11:49a, 9/12/21
AG
Quote:
Rents have popped like 20-25% ITL in Houston over the last 60-90 days. My houses that used to lease for $2,500 are now comping to $3,000. A lot of landlords haven't figured this out yet but yeah, the rental market is finally starting to catch up to price jumps.
So what's a decently updated updated 2/1 bugalow going for/month now? Zoned to Travis El if that helps.
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Red Pear Realty
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In reply to MAS444 • 12:50p, 9/14/21
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MAS444 said:
Quote:
Rents have popped like 20-25% ITL in Houston over the last 60-90 days. My houses that used to lease for $2,500 are now comping to $3,000. A lot of landlords haven't figured this out yet but yeah, the rental market is finally starting to catch up to price jumps.
So what's a decently updated updated 2/1 bugalow going for/month now? Zoned to Travis El if that helps.

There hasn't been a huge subset of 2/1 lease comps zoned Travis in the last 60 days, but my guess would be somewhere around $1.75 to $2.00 PSF or so. Without knowing the property in the Heights its more difficult to say.
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MAS444
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In reply to Red Pear Realty • 1:04p, 9/14/21
AG
Thanks. That's about what I thought but was hoping you were going to say more now!
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TXCityGirl
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3:29p, 10/5/21
In the same situation. Have tried to buy but haven't won an offer this year. Can't decide if we should rent longer and put our down payment money into college funds or actually buy in the next 6-8 months. Demand hasn't slowed down, multiple offers every time we have tried to buy. Have kids going to college in 4 years (two will be in at the same time), so it's tough to decide. There isn't much of a tax benefit to buying at the end of the year like now.
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dubi
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In reply to TXCityGirl • 4:15p, 10/5/21
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TXCityGirl said:
In the same situation. Have tried to buy but haven't won an offer this year. Can't decide if we should rent longer and put our down payment money into college funds or actually buy in the next 6-8 months. Demand hasn't slowed down, multiple offers every time we have tried to buy. Have kids going to college in 6 years, so it's tough to decide. There isn't much of a tax benefit to buying at the end of the year like now.
Unless you are buying an expensive home, there may not be a "tax benefit" at all.

Our mortgage interest and property taxes never exceeded our standard married filing jointly deduction.
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