LaurenJean09 said:

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My fianc and I just got our preapproval to buy a house in DFW. We are really looking south of DFW near Mansfield. I have had multiple people tell me that it is a terrible idea to buy right now because we will just end up upside down on our house in a few years. What are y'all's thoughts? Thank you!

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You're not wrong it's a probably a crazy time to buy. But then again, I thought it was crazy to buy my first house in Circa 2018. I'm sure others felt the same way in the 70s, 80s, 90s and 00s. But its turned out well cause we have so many people moving to the metroplex and the area is consistently growing with demand. I don't foresee that stopping anytime soon because we have great business environments, favorable weather (usually) and plenty of support for growing families and communities.

Needless to say, I wish I had red pear helping me when I bought my first house, I would have saved thousands dollars towards using an "Aggie" realtor. And it would have help my wife and I prepare our newborn room wayyyyy more.

If you need help, I'm here! And best of all, I'll help you save money and put it towards the kiddo!

I think you are getting some bad advise. The DFW market should be strong for several more years at minimum.

The bad idea is having to fight with other buyers.
Prepare to be outbid. Doubt you'd end up upside down in a few years.

First an anecdote and then some facts.

I put a house under contract on February 7, 2020 in the Heights in Houston. We were set to close in mid March but the seller passed away unexpectedly. As you might expect, I'm friends with folks in various circles of the real estate world, from residential to commercial, investors, lenders, basically covering the world of real estate. When Covid hit, everything just kind of ground to a halt in the real estate world and not much happened from mid March until the end of May 2020. Oh yeah and at one point, WTI (oil) literally dipped to being priced in NEGATIVE dollars. Folks were paying people to take delivery of crude oil. Crazy times in Houston. During that time, while we waited for the estate to probate, you would not believe how many people called me out of the blue and said things like "Don't do it man" or "This is crazy, just walk this deal." I had just one friend in the industry say "do it". And I'm so glad I did. We got a 6,000 SF lot, house, and garage apartment for well under $400,000. Today it's worth a LOT more than that, and if I had listened to the crowd (remember, a lot of these folks are considered experts in their field), then I wouldn't have done the deal. Even if the market tanks twice as bad as it did in 2008-2009, I'd still be up more than $100,000.

Ok so now for some facts.

1. In the worst real estate crash in our lifetime (2008-2009), most of the Texas market fell about 7%, then fully recovered within 2 years. Prices are now almost double what they were back then in a lot of markets.

2. I always tell clients that if you don't intend to live in or hold a home around 5 years, you should continue renting. Our 2% rebate is awesome, but there are still costs associated with buying and selling that you have to consider. And your home shouldn't be viewed as a speculative investment. It's a place to live. Don't chase the Jones'. Refer to point 1 above…if you bought in Texas in 2007, and held for 5 years, you probably did just fine.

3. Let's say you buy a home for $300,000 then sell it for $300,000 in five years. Did you really break even? Or did you live for free for five years? (Of course you paid taxes and insurance and miscellaneous costs, but you also paid down your mortgage.)

4. Most people are like sheep, they just follow the crowd. You do you. Be fearful when others are greedy, and be greedy when others are fearful.

5. A lot of first time homebuyers (and experienced folks too for that matter) have a really tough time grasping the fact that regardless of how hot the market is, in real estate, you can still find good deals if you look hard enough. Fact.

6. Luke is awesome and would be a great guide for a first time homebuyer like yourself.

I can tell how young you are. 08-09 was nothing compared to mid eighties.

Red Pear Realty said:

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And to expand on my post above, I'm not a Dave Ramsey disciple, but I really like his suggestion of getting a 30 year mortgage and making payments as if it were a 15 year note, especially for your first home. That way if something pops up, you have a buffer.

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No reason to pay off "cheap" debt in a high inflationary period

I agree but you're offering the OP meat when she needs milk. Since the Fed started expanding its balance sheet by trillions, I've personally taken out millions in real estate debt because I knew/know what the result would be. But when someone like the OP starts a thread like this and says the things she does, I'm not going to advise them to leverage up to the max.

LaurenJean09 said:

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My fiance and I just got our preapproval to buy a house in DFW. We are really looking south of DFW near Mansfield. I have had multiple people tell me that it is a terrible idea to buy right now because we will just end up upside down on our house in a few years. What are y'all's thoughts? Thank you!

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I would try to avoid anyone who tells you to wait until things "get back to normal." The new normal isn't going to be reduced prices. It's going to be more stable pricing increases.

Because she's not worried about return and maximizing wealth, she's worried about if she should buy at all because she might be underwater at some point in the future. So the advice I gave her was great for her. And not great for me. Not sure why that's difficult to understand.

OP, when you moving? We live down in this area you are talking about - not in Mansfield but very near - and were in your situation 10 years ago when we moved in here. It is super hard to buy a starter home right now here, they are like hotcakes. Our house is now almost at 2x the value we bought 10 years ago. When we sell my wife and I are talking about opportunities to sell to someone like you for fair market price rather than someone swooping in and purchasing our house for leasing. We are talking about moving this year based on family situation, maybe we can chat, I know life never works out so we may not connect based on needs and timing with our house but happy to tell you about neighborhoods down here.