Rent or Buy | Post-Apocolypse Version

I swore by The New York Times calculator.  It still is the gold standard.

They had excellent help and great UI and UX.

Have fun, go there and fill it in. Take a snapshot, then come back here.

OK, forget about everything you just saw.  It’s somewhere in 2021.  We are all over the shock of the apocalypse.   The cookie jar is wide open in Congress, trying to get America back to buy real estate.  Credits for home purchases are discussed. But, they finally realize what I talked about in the aftermath of the great recession is that the buyers who got the credit were already buyers.  It didn’t help.  Plus, there was no repayment when you sold.  That was a mistake.

Now, back to reality.

Until the mortgage world gets sorted out, the only buyers are investors. If you want to read details about the mortgage crisis, click here)

What are investors going to do?  Rent.  Then, rents will come down because there is a great supply of units available when we get back to a moderate employment level.

Values will decline until mid 21, and then we will see a slow increase until early 2023 for the mean and median home prices.  It all has to do with jobs.  Period.  Period. Period.  (Yes, Sheldon Cooper reference). 

That’s when the analytical buyers will come in.  The trends of hiring will be increasing; consumer confidence will startup.  That’s when they will be buying.  

The psychology of an emotional home buyer is to ask themselves: do I/we feel comfortable buying this home and living there for the next 10 years without regretting it?  And after having recovered from this panacea of internship in your own space, there are other things to worry about like the value of the dollar, the election results, some foreign country that will inevitably go bonkers and do something stupid to disrupt some important supply chain and any other unimaginable happenings.  We are never going back to “normal.” 

It also takes a while after being hired at a new job to get settled and enjoy reasonable rent.  They also need a down payment (at least 3% up to $710,500 and (probably) 10% over that).

Once that level of desire exceeds the fear, then the emotional buyers will be back to increase prices for the analytic buyers.  

That chart will look a lot sweeter eventually if you can keep your same, steady income.  Right now, be sensible.  Even at the worst of the last crapper, I was still getting mortgages for people with 5% down and 680 credit scores on clean properties with no problem.  

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