Quote from @Josh W.:
I’ve been looking for a house hack to rent by room in St. Pete/Tampa, but honestly the market has me unsure right now.
Seems like prices are dropping and I don’t want to catch a falling knife as they say. I'm a 23 year old first time home buyer, and I’ve definitely been stuck overthinking everything.
Is now a dumb time to buy? Or is waiting even riskier?
Would really appreciate any thoughts!
Time in market > timing the market. As a fellow house-hacker, I still remember being told prices were going to come down every year now since I bought my first house-hack back in 2019.
In real estate and other investments, you lose when you sell low. People sell low when they over leverage or are otherwise "forced" to sell. The way you should think about it is this: You have to live somewhere. Rent has increased and followed pricing increases. If you buy what you can afford and it pencils out today, you will be good in the long term. If prices drop further, great! Your property tax will go down too and your profitability remains the same. If prices go up, great! You are gaining equity now.
Another important aspect of investing is "dollar cost averaging". I see too many people that try and time real estate act like they are only ever going to buy 1 piece of real estate. If that's the case, that alone isn't much of an investment strategy - just like investing in a retirement account you need to continue to add to it and not hyperfixate on your one and only lump sum you deposit. Dollar cost averaging is how you curb "risk". Buy as frequently as possible. Prices come down? Great! You can get your next deal at a better price/profitability ratio than your first! You didn't LOSE on your first deal, it is still profiting.
No offense, but the advice given above is terrible. Buy when prices start to increase? Prices increase when demand increases. There is so much more cost than the purchase price in scenarios like this. For example in recent years, when prices were increasing, they were going up so fast appraisals (which look backwards 6 months) were behind. To be able to finance anything, you likely had an appraisal gap and had to come out of pocket in cash to cover it. That is a much "worse" timing of a deal than anything.
The fundamentals of the Tampa Bay area are so strong long term. The migration, the job growth, the desirability, etc. There is no way that in 10-15 years or longer the prices of the homes here are not going to be at least double to triple their current values. At a conservative appreciation rate of 4.5%, that leads to doubling in around 10 years.
I think a lot of people use the 2010-2020 range as a "baseline" which is a big assumption. This was arguably one of the MOST affordable times in history to profit from, and invest in, real estate. During that run, the average appreciation of real estate nationally was around 3-3.5% and more so for metros. To assume we will see the same rates of appreciation over the next 10 years is absolutely silly - just take a look at any chart of the money printing in the US in the recent past (https://www.google.com/search?sca_esv=45b2a14af5ca2da4&r...).
This chart should blow your mind. Assets like real estate tend to keep pace with and even exceed the rate of inflation. We have not yet seen the full impacts of the money printing on inflation in the US especially long-term. I would imagine that the inflation rate on average the next decade will be higher than the rate it was in the 2010-2020 range. That will also directly impact housing appreciation. Remember: it is less about the fact that houses are appreciating and more about the fact that your dollar is worth less and less (inflation).
Anyway, long rant. I am an active investor, agent and house hacker. I have helped many people just like you get into their first house-hack deal to set them up nicely for their 2nd, 3rd, 4th, etc. There is more power for you as a buyer now, than there has been here in the past 5 years! There is still opportunity to be had - and I definitely would not wait for interest rates to drop (my guess, they will come down to maybe 4.5%-5% in the late 2026 timeframe or early 2027). When people can afford more due to rate drops, as we saw recently, that goes right into the purchase price. Cars, houses, etc. When people can afford more suddenly, the owner of the assets get the advantage and will sell at a higher price because there is more demand.
