I just liquidated an investment which gave back $1m in cash. My spouse and I are deciding if we should purchase a starter home with the fund in the Bay Area right now. We live here and see ourselves settling in the area for the long term. And if the housing market stays hot, we don’t want to get priced out.
However, there are reasons that keep us on the fence. Since both of us are relatively young/inexperienced with investing, I would love to hear the advice from this community.
Factors for Waiting:
- We are not expecting to have kid for at least another 5 years. So far, we feel okay renting a modest 2br condo.
- I’m in the process of applying for grad school. Since good local programs are limited, there’s a high possibility I will be out of state for two years in the mid future. It’s highly likely that I will come back to the area upon graduation. But there’s uncertainty.
- Prices are just too high. And there could be a market shift coming, with rising interest rates and flattening yield curve not yet impacting US equity market. The sentiment in the Bay Area seems to shift a bit, too. Among my friends, two couples have postponed their home buying plan this summer due to higher than expected prices. However, a few couples are ‘observing’ closely too, probably ready to pull the trigger once they find a ‘deal’. The job market here doesn’t seem to weaken yet. We are neutral on the outlook. But I wonder if I should wait a few months to see where the midterm and global equity market is going.
At this moment, we are torn between buying and waiting for another 12 months to decide. If we don’t buy, we can’t think of a good and low risk way to invest other than CD or bond.
Any insight would be appreciated!
Submitted September 19, 2018 at 02:54AM by bing320727 https://ift.tt/2ML4bvP
