change

Lately I have been spending more time on the home browsing site Zillow than I’d care to admit. Especially because we are renting our current home and plan to for another year or so, so we won’t be in the home buying market for a while. But I often find myself drawn back to the site, perusing the houses for sale in our neighborhood. While walking the dogs I tend to take different routes and walk down different streets, partly to break up the routine for the doggos and also to keep tabs on the real estate market in our area. What’s new on the market, what’s sold and those houses that are languishing unsold for some unknown reason.

Most days I will see a few houses for sale and start contemplating what we would change if we bought one.

“Oh, that one looks interesting, we could add a fence and it would be a perfect backyard for the kids and the dogs.”

“Hey, this one has been on the market for almost two months? Maybe there’s something that is scaring people away and we could get a good deal on it.”

I even find myself playing around with a home loan excel spreadsheet, plugging in today’s interest rates and the home prices in our neighborhood to get a feel for what the monthly payments would be.

I’ve been doing this even as we are more than happy renting for the near future and know the prudent financial move, as well as our plan, is to definitely not buy a house yet. We are still getting to know the area after only living here a little over 6 months.

But these feelings, along with conversations I’ve had with my wife have me wondering. Are some of us just meant to be homeowners and others renters, or is something else at play? Maybe I’m letting my feelings get in the way of rational decision making and I need to take a step back and look at the issue from a different vantage point. I know that the sound financial decision for us right now would be to keep renting, so I spent some time really thinking on it to see if I could come up with some possible reasons that I keep being drawn back to those home search sites.

Change is hard

This is the first house we’ve lived in over the past nine years, that we haven’t owned. That’s a pretty big change from the way we’ve been operating. Some of the things about it are great. I don’t feel at all bad about calling the property manager when something breaks so that someone else can come fix it. We haven’t had any major repair issues, like the AC going out, that we’ve had wait a long time for a fix. I know how to lay mortar to re-set tile and replace a leaky toilet, but I was happy enough to have somebody else do it. Along with not having to do the repairs, we also don’t need to budget for them either. Being a renter means you don’t have to pay more than your monthly rent and utilities, and hopefully your kids and dogs puke on the hardwood floors instead of the carpet, that way you get your security deposit back at the end of the lease.

You also have to take the bad that comes with renting along with the good. Since we don’t plan on staying in this house for more than a few years, sometimes it’s hard to make it feel as “homey” as we’d like. I have plenty of friends who were happy to have something other than white walls in their new homes after years of apartment living. We try to hang pictures and decorate to make the house feel like our place as much as possible, but there are lots of little things we’d change to make it feel more like “our place” if we owned it.

Feeling unsettled (or, change is hard part 2)

Along with the change of going from owning a home to renting, is the additional change of moving 2,000 miles away from where we lived before. This has been a big adjustment for us. Getting used to a new place, meeting new people, finding new schools for the kids. It is a lot for anybody to deal with. We love Boise and our neighborhood, and are working on making new friends for us and the kids, but I wonder if subconsciously my mind thinks buying a place will make us feel more settled in and secure here. These feelings will probably fade as we live here longer, but for now I wonder if my mind is trying to cling to something it recognizes as normal with so many new things going on around us.

FOMO

In general house prices have been increasing, and every city and state is different, but here in Boise the real estate market has been on fire. House prices recovered from their recession lows and have been on a tear for the last 4-5 years. Boise is one of the fastest growing cities in the country and new home construction is having a hard time keeping up with the demand. If you talk to anyone in town they will probably tell you that we are near the top in prices, but that they thought the same thing two or three years ago and they’ve only kept going up.

Even with our plans of renting for a year or so, it is easy to get swept along in the frenzy that goes with a hot market. After all, that’s how you get the dot com bubble, or the housing market that lead to the financial crisis in ‘08. When you see prices do nothing but go up it becomes hard to resist joining along with the crowd. I will catch myself thinking, “well maybe we should buy one of these houses now, before the prices go up by another 8% next year”. This is a situation where it is best to have a financial plan to refer to, preferably written down, otherwise we could easily get caught up in the euphoria of the market and make a terrible decision. Our plan is to rent for 1 ½ – 2 years so that we are sure about the area we want to live and don’t end up with a house we need to sell in less than five years. If we made a rash decision and then had to sell a year later, even if the housing market still went up 8-10% we would at best break even after factoring in all the costs that come with buying and selling a home.

We are committed to staying in our rental home for another year, as much as my subconscious might try to get us to leave for something different. We will see what the future holds in the next year. Will we come to enjoy even more the ease of living in a rental and not worrying about home improvements, or will we chafe under the feeling of not being able to change the house to suit our style if it belonged to us? Are we temporary renters, destined to be forever homeowners, or will this experience change us into renters for life?

Either way, letting your emotions take the lead is usually a recommendation for trouble when financial decisions are involved. I’m doing my best to stick to my plan, until some new information comes along that causes me to re-evaluate it.

I’m interested to hear if you have thoughts out there on owning vs renting. Are most people temporary renters, until they can finally buy? We have friends here whose parents have only ever rented, which is very different from our experience where most everyone owns their home. Let me know where you stand, you can send me an email or post in the comments. I’m curious to hear your thoughts.