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Just jumping in to say that I agree with the bolded portion of your post.
I can only speak for myself but as a somewhat recent transplant to the area (moved here in March of 2017) your point factored into my calculus.
My equation was basically this.
We lived in a very expensive part of the country, 40 miles from my office (on days I went to it), with great schools where I could afford a place to live that wasn't "superficially nice" but that even in a "down or recovering" economy I knew I could get 4% annual rate of return on my home (and we did get that when we sold).
I'm assuming you benefited from the $500k tax free profit benefit the government provided your family to sell your home and put it into a home here. I realize that we probably won't moving forward now that we live in Cary. Just have to come to terms with that fact I guess.
Just jumping in to say that I agree with the bolded portion of your post.
I can only speak for myself but as a somewhat recent transplant to the area (moved here in March of 2017) your point factored into my calculus.
My equation was basically this.
We lived in a very expensive part of the country, 40 miles from my office (on days I went to it), with great schools where I could afford a place to live that wasn't "superficially nice" but that even in a "down or recovering" economy I knew I could get 4% annual rate of return on my house (and we did get that when we sold).
I was willing to trade all of that for a less expensive part of the country (at least for RE and RE Taxes), good to great schools, a McMansion that cost about half here what it did there, with a great neighborhood and neighbors.... and I did this knowing full well that RE appreciation here wont ever (more than likely) equate to there.
If I can sell our house someday for what we bought it for, I'll gladly walk with the equity I have in it. Anything more is just gravy.
We are fine with a "home" not a "house".
The issue is a lot of people come to an area like this and have all this extra spending money, and spend it on superficial stuff instead of saving it like they should. Whereas in the more expensive part of the country, your house is forced savings and an almost guaranteed solid investment. As long as you aren't continuously doing cash-out refi's (which some do), then you're in better shape for retirement than most, especially if you plan on retiring to a place with lower cost of living. Most people that come here are likely saving the same amount as they were prior to moving here, but they aren't sitting on that big fat chunk of home equity.
Not sure where you came from, but I wouldn't say that the RE appreciate here won't ever equate - in my opinion it will likely come close someday. But that won't happen until there's no more land left to build on.
I'm assuming you benefited from the $500k tax free profit benefit the government provided your family to sell your home and put it into a home here. I realize that we probably won't now that I live here, especially not in Cary. Just have to come to terms with that fact I guess.
Yes. The proceeds from the sale of our house there were right around $80K so we were under that cap.
And all that money constituted our down payment when we bought here.
The issue is a lot of people come to an area like this and have all this extra spending money, and spend it on superficial stuff instead of saving it like they should. Whereas in the more expensive part of the country, your house is forced savings and an almost guaranteed solid investment. As long as you aren't continuously doing cash-out refi's (which some do), then you're in better shape for retirement than most, especially if you plan on retiring to a place with lower cost of living. Most people that come here are likely saving the same amount as they were prior to moving here, but they aren't sitting on that big fat chunk of home equity.
Not sure where you came from, but I wouldn't say that the RE appreciate here won't ever equate - in my opinion it will likely come close someday. But that won't happen until there's no more land left to build on.
We moved from MA - 43 Miles SW of Boston, 20 Miles NE of Providence.
PS Show me where new housing prices are still going up now as you claimed. Show me the stats.
Now? As in December 20th? Nobody is claiming prices are going up NOW, which is why I bought. Why would I wait for a high in the market to buy?
With respect to the cyclical nature of real estate, your own graphs answered your question.
If you're looking for a reason to justify why you need to rent or can't afford to buy here, that's fine. Don't pass off articles that you know little about as fact.
Your argument started with showing facts for the national trend.
Then you provided graphs showing local trends that "proved" your point.
Then literally everyone here pointed out to you that now is the SLOW TIME. (again your graphs would have shown the cyclical nature).
I see year over year a general increase in price (that somehow you can't figure out)
Are there going to be pockets of real estate driving down other factors - sure. This is where your due diligence as a buyer comes into play.
I'm not a Real Estate agent but your entire post is the prime reason for engaging one (or more) to give you detailed information on any question you may have. They don't charge for you to "kick the tires" and have far more tools at their fingertips than opinion pieces found online.
But to come up with the argument "I need to rent because I read a story on the internet"...BS.
We moved from MA - 43 Miles SW of Boston, 20 Miles NE of Providence.
Ah a fellow M*******
I can see this area reaching Boston metro prices. Maybe not to Boston, Cambridge, Weston, Concord, etc, but the more typical middle class suburbs.
The main difference between there and here is, there's no land to be built on inside 128. If I were to guess, the Triangle probably has one of the most rapid new construction rates around. They also cram in houses like sardines here, whereas up there many towns have relatively large minimum lot sizes. That does help keep the taxes here lower though (and county schools).
I can see this area reaching Boston metro prices. Maybe not to Boston, Cambridge, Weston, Concord, etc, but the more typical middle class suburbs.
The main difference between there and here is, there's no land to be built on inside 128. If I were to guess, the Triangle probably has one of the most rapid new construction rates around. They also cram in houses like sardines here, whereas up there many towns have relatively large minimum lot sizes. That does help keep the taxes here lower though (and county schools).
Hahaha yes, but I am not a native M*******. I had to learn it
Yes I could see here reaching price points similar to what you find inside the 495 loop but it would never reach inside 128 prices; my buddy just sold a his 3 bedroom townhouse in the Dot for $800K.
I mean the Dot has come along way in terms of safety....but "close" to a million bucks for a townhouse is crazy crazy.
But yes, not much land left. Not to mention regulations around the types of subdivisions you can build. They just don't allow the kind of development we do here, there, even if the land were available.
Call me old fashioned but I believe your choice of primary residence should be based mostly on how it immediately improves your quality of life. Safe, convenient to work/commute, good schools, amenities, recreational opportunities, general home layout, neighborhood “vibe”, cultural events, community support, traffic. If it goes up in value significantly that is a bonus -maybe? Maybe not -depending on how your income has kept up with property taxes and relative to prices of other houses in the area (if you plan to “upgrade” and stay in area).
The idea of your house primarily being an investment vehicle is what got us into that mess back in 2008.
If you want to invest in real estate then go buy up property that is not desirable now but maybe in the future. I’m thinking either on the edge of a metro or an inner-city place that could gentrify; places you would never consider living in currently. Again, not desirable now… but in time. Think of buying property in Fuquay-Varina, that is now sprawling with brand new 400K+ subdivisions, 15 years ago. Or certain locations in DT Durham or Raleigh.
Could also invest in REITS.
Say it louder for those in the back! I've had a few buyers who are OBSESSED with the thought of a home being a "good investment" and freaking out about the idea of not being able to sell it for a profit in a few years. That's not why you buy a house; and if a financial investment is your main motivation for purchasing a home (unless it is an investment property you plan to rent out)....please do us all a favor and continue to rent and invest in the stock market instead.
Say it louder for those in the back! I've had a few buyers who are OBSESSED with the thought of a home being a "good investment" and freaking out about the idea of not being able to sell it for a profit in a few years. That's not why you buy a house; and if a financial investment is your main motivation for purchasing a home (unless it is an investment property you plan to rent out)....please do us all a favor and continue to rent and invest in the stock market instead.
A house is likely the largest investment you'll make in your life - why wouldn't you want it to be a good one? Life can change at the drop of a hat - nobody wants to take a loss if they can avoid it.
For that reason, we chose to live in Cary versus Holly Springs due to its closer proximity to career hubs, more amenities, more convenience, etc. We didn't get a brand new house, but we know our house will be a solid investment in the future. Not to say that Holly Springs isn't a good investment, but a place like Cary will always be a better investment in my opinion. Location location location.
And I'm not saying that Cary is immune to losses, but again, location, convenience, and amenities.
A house is likely the largest investment you'll make in your life - why wouldn't you want it to be a good one? Life can change at the drop of a hat - nobody wants to take a loss if they can avoid it.
For that reason, we chose to live in Cary versus Holly Springs due to its closer proximity to career hubs, more amenities, more convenience, etc. We didn't get a brand new house, but we know our house will be a solid investment in the future. Not to say that Holly Springs isn't a good investment, but a place like Cary will always be a better investment in my opinion. Location location location.
And I'm not saying that Cary is immune to losses, but again, location, convenience, and amenities.
To clarify...long-term appreciation/desirability is ABSOLUTELY a factor that one should consider when buying a home.
The folks I'm referring to are the ones who think they should buy a house now so they can sell it in a year or two and make a ton of money off the profit. As NCRunner77 said......that's a big part of what destroyed the world economy a decade ago.
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