This question comes up more after the market has been going up for a while. People worry about the proverbial “bubble” housing market. What if you get “caught” buying a house, and the market falls out from under it?
So should you buy? The answer is YES! And here’s why.
Let’s talk about a few things. First, the primary function of your home is to keep the rain and snow off your family. Homes are really good at this whether your home’s price is $500,000 or $350,000.
Next, “unrealized losses”. That means that you’d lose money if you sold right now. For most people that are purchasing a home right now, they’re not planning to sell it next month or even next year. So, if the market drops out, there’s a good chance, you’re already planning to live in it long enough to allow the market to recover. This is a much bigger deal for house flippers than typical homeowners.
Where you are in the housing market matters as well. Higher end homes tend to suffer larger equity losses earlier. Lower market homes tend to be impacted very little (if at all) because everyone’s gotta sleep somewhere.
Finally, let’s talk about real estate’s track record. For the last 70 years, real estate has provided the most-stable and most-reliable growth despite ups and downs, including the 2008 housing crisis. Your home will continue to increase in value, right under your feet…even if you experience a market downturn.