Quote: (09-06-2013 05:41 PM)j r Wrote:
Trying to predict macroeconomic trends isn't really the best way to make this sort of decision. I would just do a cash flow analysis and figure out how long it's going to take you to get back your initial investment and start earning profit. If you're worried about the market, just run a few different scenarios.
Also, what are you going to do with the house? If you're planning to live in it, then resale value won't mean that much. If it's an investment, even if sale prices drop, the house still has rental value.
This. If you want to worry about macro trends and/or make money off them, that's entirely separate from what you should do in relation to your own housing situation. You need a place to live, and as long as you have a way to pay the rent or mortgage, that's what determines your own personal "bubble".
I'm not worried about a crash because I have a fixed mortgage on my residence, and plan to live in it for many years to come. So I don't really care how its market value changes from year to year, as I'm deriving benefit every year from having a place to live. For me, my primary residence is primarily about lifestyle (location, amenities, etc) and not an investment.
I think people are mixing up micro and macro here a bit.