My husband and I bought a house in 2004 with an 80/20 mortgage at 8%. We bought high; home prices had doubled from the previous couple years, before our purchase, of course. It seemed crazy that we paid $320,000 for a house, especially when $160,000 seemed so unaffordable to us just 2 or 3 years prior. The market continued to go crazy and we made well over $100k before we ever moved in. Naturally, we refinanced the loan, pre-payment penalty and all.
In the years after 2008, we talked about short selling that same house that had equity just 5 years ago just to get out from under it. We ultimately decided that it didn’t make sense to do that because we would just be paying rent somewhere else, so we chose to weather the storm.
Do I wish we would have bought two years prior to that for half as much? Of course I do. Do I wish we would have bought 50 houses between 2008-2013? Of course I do. The point is, there is never a perfect time, so I am grateful that we just got in the game.
Fast forward 10, maybe 12 years…We now have a house with a $1335 monthly payment. We have a home that is worth more than double what we paid for it, even in 2022, after the market has had some significant adjustment. It is a rental for us now, but as our kids are older and college age, we can rent a couple bedrooms to their friends and they can live free or we can rent it at market rate and have no student housing costs; we have so many options.
Real estate appreciates, on average, in Washoe County 6% a year. If that house is worth $650,000 right now, next year it’s worth $689,000 and then $730,340 the year after that. We enjoy the benefit from years of future appreciation, and someone else paying our mortgage.
Don’t worry about rates and what the market is doing or can do, or 10 years from now, you’ll beat yourself up when you’ve paid your landlord’s mortgage 1/3 of the way off and you’re just getting started. Stop sitting on the sidelines and just get in the game.
