Should I Wait to Buy a House in Kansas City?
Real estate is hot right now, but you already knew that. Why? Because housing is one of our biggest expenses in life, and real estate will also likely be one of, if not the single most valuable asset we will ever own. It’s not uncommon for someone who doesn’t know much about markets, or their budget, to still be aware of what the temperature of the housing market is.
That has you and your family wondering, “is it the right time to buy a house in Kansas City?”
Your motivation
Maybe you’re asking because you’re finishing up your education and it’s time for a new chapter. Or perhaps you’ve been renting for a while, waiting for the “right” time to pull the trigger on the first house purchase. Or it could be that your season of life has changed and it’s time for more (or less) space. Or you’re just ready for new scenery! Lots of unique reasons you may be considering making a real estate acquisition.
Whatever your reason, you’re likely feeling apprehensive because you don’t want to make a mistake with such an impactful part of your life and financial plan. That mixed with the housing market being on a tear the past couple years which only seemed to accelerate with the pandemic. You may not know a lot about the housing market, but you know common sense tells you to sell high and buy low, and right now it seems like all there is to do is sell high and buy higher.
The data and trends
Because market prices have been going up really fast recently, it is true you would be buying a house at relatively high prices if you bought now. Zillow reports that US housing prices have risen 9.1% in the last 12 months, and in Kansas City, MO that gain is even higher at 12.8% (however, many sections of KC are closer to the national average).
However, Zillow estimates that prices will increase another 10% in the next 12 months! So what if you wait and prices go even higher?! But how does Zillow, or any other forecaster know what is going to happen in real estate markets?? What if interest rates spike quickly a few months from now? That certainly will put a halt on price increases, right?? Prices could go up….and prices could go down….what in the world is a thoughtful family to do!?!
Is it the right time to buy?
So, should you wait to build or buy a house in Kansas City right now?
The answer is you should absolutely buy now….IF there are thoughtful non-financial reasons for doing so. Those reasons may include:
You’re expanding your family and it would be really difficult to fit them into the square footage you have
The neighborhood no longer fits your values
Work has gone back to non-virtual and it would make sense to shorten the commute
Work has gone fully virtual permanently and now it makes sense to move closer to family
You have too much square footage that you’re not fully utilizing
Your closest family or friends have moved to another part of town
You want to be closer to a specific school or educational/training opportunity
That’s not an exhaustive list, but all real examples of clients who have bought a new and/or different house for non-financial reasons. And if any of those are true for you, then you can seriously consider pulling the trigger on buying a house if you find the right fit.
Housing does have a major impact on our finances and financial plan, no doubt about it. But your housing is much more than a financial decision. And when the markets are stressing you out and making your choice difficult, you need to take that decision to the domain of what you actually know for certain and what you control.
Might you be buying at a terrible time? What if prices crash right after I buy? It’s a valid question, but those factors are out of your control. Prices very well might crash in the short term right after you buy.
But are you really buying this house for a short term price gain? Hopefully not. Hopefully you’d be buying because you’re clear the house will support your family’s values for the next 10, 20 or 30 years. And if that’s why you’re buying, then it really doesn’t matter what prices do in the next few years. And that’s really good news, because you have zero control over those prices.
Conclusion
What you know for certain and control is your family’s values.
The most honest and wise answer to the question “Should I wait to buy a house in Kansas City?” is, it depends. It depends on your circumstances and values. And if you’re still having a hard time making a choice once you bring it into the domain of your values, then it’s probably time to call a financial planner to help you.
It’s amazing the clarity an experienced, thoughtful, and professional third party can bring.
