Let’s face it, lots of housing markets in the U.S. are currently stuck in monstrous bubbles that seem to be just about ready to go belly up. If you’re a seller, you couldn’t hope for much better when it comes to closing down your house, taking the money, and running for the hills. On the flip side, as a buyer, it can feel like the only thing you can afford is the free weekend class at Home Depot to show you how to unclog your drain.
I won’t lie; the market currently looks like it’s set for seller success. But before you toss in the towel and throw yourself a pity party at the nearest Chucky Cheese, let’s look at a few things you can do to position yourself for future success in the housing market.
Find Your Qi
It’s time to master the demons that live inside of you. You know, the ones that keep telling you that even if you buy in a bubble, the price will eventually come back up. If you buy a house that is far outside your price range with future expectations of growth, you’re going to have a bad time. No market is a sure bet and of all the things you’ll purchase in your lifetime, your house is most likely to be your largest. That being said, you need to find whatever patience you have and hold onto it like it’s the last snack you have on your ten hour non-stop road trip. Wait for a good opportunity where you can get the house you want at a fair price.
It’s extremely easy for a realtor to justify just a little bit more out of your intended price when you’re looking for the house you want. That’s why they will try to show you something that is above the budget you gave them with the hopes that you’ll find additional money in order to get that king size tub that you’ve always wanted but will seldom ever use. With that in mind, the best weapon against this sales tactic is to set your price target before you ever sit down with one.
Then, and this is the key to success, never let them show you a home that is outside your set budget (no matter what!). This way you never get shown a house that will tempt you to buy something you shouldn’t and your realtor will be reminded who holds the power in your relationship. It’s a win-win for you!
Being forced to move into a new home because you have too much stuff in your apartment or smaller home during a bubble? If that’s the case, consider renting a storage unit instead. They’re cheap, they’re located everywhere, and they may actually show you how little you need the stuff you’re renting the space for. This way you can wait out the housing bubble until the prices have gone to a more reasonable going rate and simultaneously live a less cluttered life.
Wide Net Policy
Just because most markets are oversaturated with overpriced housing traps doesn’t mean that all of them are. Try widening your search to areas outside of your originally intended one to see if there are any that you could find a bargain in. A lot of the time, when housing markets are booming, contractors will try to make new housing developments to make money while the market is hot. If you can wait, when the bubble bursts and they’re left with handfuls of empty move-in-ready homes, you’ll be left with brand new neighborhoods that are a little out of the way but with prices slashed to bargain territory.
Is your home search during a bubble getting you down? Try changing your plan of attack to a different target. Instead of getting discouraged by all the homes that you can’t buy at their current prices, aim instead to save a pre-determined amount of money in a side account.
Try to set a goal to save $10,000 by the end of the year. This task will serve as a distraction to ease your brain away from thinking about your ongoing housing woes and it will at the same turn into a nice downpayment if you choose to use it for one in the future. After all, there’s nothing wrong with saving a little more money for a rainy day or for a smaller monthly payment when you finally get that home.
Build Your Home
Now, depending on the options in your area, you could skip the home buying experience altogether and focus your efforts on building your own dream home. Simply buy the land, purchase a blueprint from a local architect, and start building. Don’t think it can be done?
People do it all the time. And in this day and age when there are videos available all over the internet and free home renovation classes available through Lowes or Home Depot that walk you through it step by step, there’s nothing you can’t figure out how to do. Don’t believe me? Do a simple internet search on tiny homes. There are college kids with no prior home building experience that put them together in a matter of months. Your project would just be a little bigger in size (or you could just build a tiny house…).
And that’s all for this week, folks. Make good financial decisions and remember to always question a man who offers you free churros.