My family and I are selling our house in Dallas, TX to move back to the San Antonio area. I wanted to get some suggestions on what we should do about buying or renting a house in the San Antonio area. Since its a sellers market, we are hesitant to buy a new house and overpay. We will make a little on our home in Dallas but did not know what would be the best financial decision to do right now. Thanks in advance for the advice
Hey @Joey Tate , good question. Think about if you think home prices will rise or fall in the next 12 months. That should help you make your decision. I'm sure some agents in the San Antonio market can give you a better idea.
I think that interest rates are going to rise slightly in the next few months but take a look at that as well since it will impact your monthly payments quite a bit.
I'm a Realtor, so take this as you will. Overpaying is kind of a meaningless term -- it needs to be relative to something.
All of this is market-dependent, as well. Right now you may be paying more that the property would have sold for last year. You also may have a 1.5% lower interest rate. Money is as cheap as it will ever be in our lifetimes, probably. Are you overpaying compared to next year, or 5 years from now?
Obviously nobody has a crystal ball, and even the best predictions are subject to black swan events (as this past year has proven). And the thing about black swan events is that they are unpredictable. Nobody thought that the pandemic would tighten the market -- at first, we though buyers would disappear!
I can tell you that demand may slow in my area but it definitely won't fade away. Even if appreciation goes back to a normal 4-5%, prices won't slide backwards. You will continue to see higher prices as the years go on. I can't and won't speak about other markets, but mine is still 33-50% cash purchases, and a ton (majority) of 20+% down conventional loans, so there's not a lot of "underwater" owners.
@Joey Tate it's hard to imagine that you'll be better off waiting. If rates go up a little bit, it could more than offset any future reduction in pricing. Unless there is a giant drop in prices in the future, you're better off buying with these extremely low rates, despite all the competition. If you look at historical pricing data, there is no reason to expect a huge decline anyway. So, by waiting you risk buying with higher rates and similar price levels. Depending on how long you're willing to wait, you could miss out on a lot of appreciation in the meantime.
I would sell at your highest price by putting all your stuff in PODS now and then renting an Airbnb monthly in San Antonio while you look for a new home and decide. I always think it's better to get moved because you house can be staged and sell at top dollar in a hot market instead of selling while you are trying to move. There are also long-term rentals, for 3 months at a time, that would be safe, furnished and then when you find a new home, all your major stuff just comes in the PODS unit.