Is it right time to buy house now?

[dinomom]

I recently bought a house (pre-tenure, had been in process since pre-covid, I am currently on the market but anticipate it will take some years to find a new position, if even possible) and it has been a great thing for my family. We were in an apartment before (bigger than our home, but with little space outdoor space) and having outdoor space given the school closures has helped immensely with the mood/post-school closure behavior issues we'd been dealing with for my young child. I know every situation is different, but for us, the quality of life has been worth it.

[Parasaurolophus]

This is not a contribution to the advice on the thread, more of a relevent puff of steam, really:

Some changes are afoot, and my partner and I are considering the possibility of trying to buy something here. It's pretty dispiriting to realize, however, that even though our income is above-average in the region, and even though we can afford a downpayment of 30%-50%, depending on just what we're looking at, we still can't qualify for a mortgage for the rest. At least, not on our own. There's some talk of combining forces with her dearest friend, which has been what they've wanted for quite a long time, but then the space requirements go up, along with the price, and the loan remains just about as unobtainable as it was in the first place. We could buy some (very nice) land outright, but then we'd have nothing left with which to build (and building here is, like, $300/ft²), and those kinds of loans look outside of our reach, too.

FWIW, houses in the area (nearby, not quite here yet) have started being sold within days of going on the market. The pandemic seems to have accelerated the market, not depressed it.

Sigh.

[Puget]

This is not a contribution to the advice on the thread, more of a relevent puff of steam, really:

Some changes are afoot, and my partner and I are considering the possibility of trying to buy something here. It's pretty dispiriting to realize, however, that even though our income is above-average in the region, and even though we can afford a downpayment of 30%-50%, depending on just what we're looking at, we still can't qualify for a mortgage for the rest. At least, not on our own. There's some talk of combining forces with her dearest friend, which has been what they've wanted for quite a long time, but then the space requirements go up, along with the price, and the loan remains just about as unobtainable as it was in the first place. We could buy some (very nice) land outright, but then we'd have nothing left with which to build (and building here is, like, $300/ft²), and those kinds of loans look outside of our reach, too.

FWIW, houses in the area (nearby, not quite here yet) have started being sold within days of going on the market. The pandemic seems to have accelerated the market, not depressed it.

Sigh.

That's very surprising that you wouldn't qualify for a loan if you can put that much down and have a decent income, but I think I recall you may be in Canada? I know nothing about the lending policies of Canadian banks. In the US, I'd say unless your credit score is very bad, you would have no trouble getting a loan (maybe a bit too easy. See also: subprime mortgage crisis, lessons not learned). Do you have credit unions there? They may be more willing to work with you than a big bank.

I feel the pain of trying to buy in a hot market though-- I still feel incredibly lucky that the first offer I put in last summer was unexpectedly accepted, and so, so grateful to be living in my own house and working in my garden through all this rather than living in a high-rise apartment complex. At least for me, the quality of life improvement was well worth the (fairly minimal given the housing market here) risk of buying pre-tenure.

I wish you luck!

[Parasaurolophus]

Oh, we can get a loan for a few hundred thousand. It's just that no loan we could get would cover the remaining cost of a house. =/

[clean]

hmmm.... IF I understand, you can put down UP to 50%.  Can get a loan for "a few hundred thousand" , but together that is insufficient to purchase a house in the desired neighborhood?

I think that is a sign that it is NOT the right time to buy a house (title of the thread).  At least not there!

When banks, in the business of lending money, wont lend on a 50% loan to value ratio, then it is not the right time or perhaps more accurately, the right Place to buy.

[Parasaurolophus]

hmmm.... IF I understand, you can put down UP to 50%.  Can get a loan for "a few hundred thousand" , but together that is insufficient to purchase a house in the desired neighborhood?

I think that is a sign that it is NOT the right time to buy a house (title of the thread).  At least not there!

When banks, in the business of lending money, wont lend on a 50% loan to value ratio, then it is not the right time or perhaps more accurately, the right Place to buy.

Oh, it's not a question of neighbourhood. It's a question of anything within a four-hour drive or more. Definitely not the right place to buy, and it's only getting worse. But since we're stuck here for the forseeable future, it's a downer. The rent is already astronomical, and it's only going to get worse as our needs change. It's horrifying to see so much money going into someone else's equity.

(I mean, we could get a loan and buy a tiny condo that doesn't meet our current needs, let alone our near- or long-term needs. But that's it.)

[Puget]

hmmm.... IF I understand, you can put down UP to 50%.  Can get a loan for "a few hundred thousand" , but together that is insufficient to purchase a house in the desired neighborhood?

I think that is a sign that it is NOT the right time to buy a house (title of the thread).  At least not there!

When banks, in the business of lending money, wont lend on a 50% loan to value ratio, then it is not the right time or perhaps more accurately, the right Place to buy.

Oh, it's not a question of neighbourhood. It's a question of anything within a four-hour drive or more. Definitely not the right place to buy, and it's only getting worse. But since we're stuck here for the forseeable future, it's a downer. The rent is already astronomical, and it's only going to get worse as our needs change. It's horrifying to see so much money going into someone else's equity.

(I mean, we could get a loan and buy a tiny condo that doesn't meet our current needs, let alone our near- or long-term needs. But that's it.)

That's frustrating -- there's  really problem with these ultra-high CoL areas where the people who are needed to work there quite simply can't afford to live there. I feel like I squeaked in under the wire in my town, as all the surrounding suburbs are already at that point and mine is rapidly approaching it

The mini co-housing arrangement with a friend sounds like a good approach if you're certain you'll get along living together (best to try in a rental first I'd think!). If there are any in your area, a formal co-housing community (where you have equity in your unit, but also access to lots of common space) might be worth considering-- if there was one in my area I'd definitely have considered it.

[fourhats]

There have been a lot of newspaper articles lately about the crazy real estate market these days in the suburbs, as people move to remote working and want to get out of cities. They are getting up to 20 offers for modest houses, and the houses are selling for way above asking price. One next door to me didn't even put up a sign, and there were so many offers on the first day it was listed that the listing shut down in 24 hours!  And I don't live in a major or urban area.

https://www.nytimes.com/2020/08/30/nyregion/nyc-suburbs-housing-demand.html

Likewise, people are booking movers months out because the demand for them is so high.

https://www.nytimes.com/2020/08/20/nyregion/moving-new-york-coronavirus.html?searchResultPosition=1

These articles are from the NYT, but apparently it's happening nationally. One person I know got tired of losing out so often at above asking offers, that they finally made an offer without even going inside the house--the realtor showed it to them via FaceTime!