Home-Grown Concerns

Some say that home ownership is wonderful, but purchasing a home is a horrible experience. I must say that I agree with the latter. After sitting on the sidelines for years and paying specific attention to the market for the past fifteen months, my wife and I are now ready to take the plunge and buy our first house. Buying a home by itself can be a daunting experience, but buying a home in New York can be frightening. For one thing, a twenty percent down payment is seen as customary these days, given what has happened to the lending market, and twenty percent of current New York home prices, even though they have declined a bit, is still a lot of cash to drop at once. This is in addition to the high property taxes New York imposes when compared to most areas of the country. Public schools in this area may be better than most, to be sure, but our daughter will not be using the schools anytime soon. We can only hope that the location and nearby schools will be attractive to potential buyers when we go to resell it.

At the time of closing, it seems as if every person involved, directly or indirectly, wants to take a piece of the pie, requiring even more cash to be on hand at the time of purchase. And then there is the uncertainty, a consideration that wasn’t one too long ago. How far will home prices drop and how bad will the current economic situation become? Is now still a good time to buy? Will mortgage rates drop by the end of the year, rise, or remain about the same? What will the resale market be like in three or five years? No one knows the answers to these questions, but they are on my mind. Should we stay renting and save as much money as we can, or do we buy now and hope to ride an upside in the years to come? With a loan of over a half a million dollars on the line, we must ensure we do this right the first time at the right time. Stay tuned.

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