I recently put down an offer on a house and am in the process of closing. Even though I understand there is a housing bubble forming, I still believe I made the right decision for a number of reasons.
First, I’m in St. Louis, which even the experts believe isn’t one of the most bubbly markets in the nation. Home prices have risen in the past few years, but more like 250K-350K, which, while unaffordable in terms of percentage increase, is still dirt cheap from a national perspective.
Second, the location of the house is great. It’s only 15 minutes away from downtown and Clayton, our business hub. Plus, I’m near a train line, which would make commuting to work, even if I switch jobs, much easier.
Third, the condition of the house is also good. It was owned and maintained by an experienced handyman/union guy who is now downsizing, and the inspection came back pretty clean.
Fourth, my monthly mortgage and escrow payments are still $500 less than what I was paying for rent in my apartment. This house offers more space and amenities than my tiny two bedroom I was living in before.
Finally, I’m not in this for the equity. This is my home and I’m in it for the long haul. My kid is already enrolled in the local school, and if I were to move now, I’d have to pay commission.
All in all, I believe I made the right decision in buying this house. After weighing all of the pros and cons, I’m confident I’m making the right decision for my family and me. It’s true that the housing market is in the midst of a bubble, but I believe I’m in a good position to ride it out.