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Here's some news: I am moving out and getting my own place, possibly as soon as May 1st. Nothing against my roommate, but it feels like it's time to live on my own again, now that I can afford it. I'm also getting tired of the daily commute to work; it's only 25-30 minutes each way, but it's a somewhat stressful drive, and I have better ways to spend that 4-5 hours a week. So I'm looking in the Burlington/Lexington/Bedford area.
The prudent thing to do would be to stay here until I have enough money saved up for a decent-sized down payment on a house. But that's probably still another year or two away, and I don't want to wait that long to move out (nor do I want to borrow from my 401k or get a "no money down" mortgage). Besides, everyone says the real estate market is going down, or at least not going up, so I don't think I'm missing out on anything by waiting. Fortunately my roommate has a friend who's willing to assume my share of the lease, so I won't have to break the lease (though I will probably end up paying double rent for at least part of May).
The other main reason not to buy now is that I'm not yet sure I want to settle down in the Boston area. I'm reasonably happy at my job (and I just got a nice raise) but right now I don't see myself staying there long term. If some great opportunity comes up on the West Coast a year or two from now, I'd like to have the flexibility to think about moving. So I'm feeling like a holding action is the right choice.
I'm a little apprehensive about moving to the suburbs. It will be weird not being able to walk to a restaurant, cafe, convenience store, bank, dentist, doctor, auto mechanic, movie theater, game store, friend's apartment, or the T. On the other hand, I can get a single-family house, which means a garage, a yard, no upstairs or downstairs neighbors, and maybe even a quiet street. I think it will be a net win, but it will take some lifestyle adjustments.
It's somewhat slim pickings for single-family rentals in the area I'm restricting myself to (less than 10 minutes commute time), but I've been to two decent candidates so far and I just replied to two craigslist ads. The one I'm leaning towards is a 2-story 3BR/2Ba on the north edge of Lexington, in a quiet, woodsy area. It has a big patio and a stone grill, so I'd be having some barbecues this summer. That's sounding pretty nice.
The prudent thing to do would be to stay here until I have enough money saved up for a decent-sized down payment on a house. But that's probably still another year or two away, and I don't want to wait that long to move out (nor do I want to borrow from my 401k or get a "no money down" mortgage). Besides, everyone says the real estate market is going down, or at least not going up, so I don't think I'm missing out on anything by waiting. Fortunately my roommate has a friend who's willing to assume my share of the lease, so I won't have to break the lease (though I will probably end up paying double rent for at least part of May).
The other main reason not to buy now is that I'm not yet sure I want to settle down in the Boston area. I'm reasonably happy at my job (and I just got a nice raise) but right now I don't see myself staying there long term. If some great opportunity comes up on the West Coast a year or two from now, I'd like to have the flexibility to think about moving. So I'm feeling like a holding action is the right choice.
I'm a little apprehensive about moving to the suburbs. It will be weird not being able to walk to a restaurant, cafe, convenience store, bank, dentist, doctor, auto mechanic, movie theater, game store, friend's apartment, or the T. On the other hand, I can get a single-family house, which means a garage, a yard, no upstairs or downstairs neighbors, and maybe even a quiet street. I think it will be a net win, but it will take some lifestyle adjustments.
It's somewhat slim pickings for single-family rentals in the area I'm restricting myself to (less than 10 minutes commute time), but I've been to two decent candidates so far and I just replied to two craigslist ads. The one I'm leaning towards is a 2-story 3BR/2Ba on the north edge of Lexington, in a quiet, woodsy area. It has a big patio and a stone grill, so I'd be having some barbecues this summer. That's sounding pretty nice.
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Not necessarily. The prudent thing might be to buy a house/condo with a lower down payment. It's somewhat of an economic fallacy to try and save 20%. For us, we did around a 5% down payment, and had a second mortgage, which wound up being cheaper than paying PMI. Then we fairly soon refinanced into a single mortgage as rates came down and the minimum to qualify for a single conventional mortgage came down. Of course that was when home values were rising and interest rates were falling, so YMMV.
"Everyone" doesn't always know what they are talking about. It's really only important if you are trying to make money on selling a house, otherwise, you should not try to time the market.
IMO, the ONLY valid reason you give for renting vs. buying is possibly needing to move in 2 years (though you still would need to run the numbers; the tax savings on the mortgage and property tax may still make your effective yearly outlay on a house smaller, even after factoring in costs to sell the house). I agree you shouldn't borrow from your 401K, or take a no money down mortgage, but you should consider a 5% down mortgage.
Have you actually run numbers on rent vs. own, figuring in the tax consequences on owning (and of course possible home maintenance expenses)?
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And I'm not trying to time the market, I'm just saying that today is not a don't-miss time to buy, and it probably won't be in the next year or two, so I shouldn't factor that into the decision.