Buying a house should always be viewed as an investment. This includes what you do to the house after you purchase it. So when buying an investment the general rule (which the vast majority suck at) buy low, sell high. Put plainly, if you are buying a house or buying shares for the DOW (if your not a day trader) right now, than you are being a financial moron.
The housing market is mainly driven buy two things, wage growth and access to credit, the cheaper that credit can be obtained the bigger the bubble in real estate becomes. So if you are thinking about buying now think again. Over the last 7 years, not just the U.S., but the globe has had the easiest, loosest monetary policy in history. Wells Fargo has recently unveiled another mortgage option requiring only 3% down and a 565 credit score to qualify! This is when you know the housing market is going to crumble and crumble fast!
Vancouver's housing market (which is perhaps the most inflated housing market on the planet, mostly because of foreign investors or as I like to call them foreign money launders) is crashing, quickly. A 20% decline in one month. Manhattan's high end real estate is suffering by a slightly lower margin, with inventory stacking up quickly as buyers dry up. Same thing is occurring in the Hamptons/Long Island.
Area's all over the country are plateauing or beginning the decent in the real estate market.
So what is the right move in this situation. Mainly limit your risk in this sector. If you have a mortgage, make sure you have a fixed rate. Dollars are flying back into this country at an alarming rate from foreign investors and central banks meaning we have to absorb this money coming back into the country. This leads to inflation quickly, which will force the banks to increase interest rates rapidly to fend off hyperinflation. Don't believe hyperinflation can threaten the U.S.? That is fine, which is why reason number two (which happened only a 8 short years ago) is even more concerning. A decline in the housing market always leads to a credit squeeze as banks try to protect themselves from all the garbage debt they lent out. This always leads to lower property value evaluations, increased interests rates as credit tightens, thus many american's again losing their homes under the weight of increased mortgage costs.
Buy hard assets now. Precious metals and even crypto-currencies are great ways to increase your purchasing power while the global debt reset occurs. The coming credit crunch will drastically reduce property costs while vastly boosting PMs. With the coming flip flop in asset prices a $100,000 invest could easily have $1,000,000 in today's purchasing power in a matter of a year or two. With that said, DO NOT have a finite timeline for your property acquiring goals. Never fight the markets and how they move. Position yourself for the inevitability and be patient, there is no room for ADD in central banker interventionist markets that we have today.
Obviously, there is much more detail and care that needs to be taken whenever investing so please visit my previous post for recommended investment guidance by some of the best out there. Do your research!
Happy Investing!