The Truth About Someday is Someday Never Comes

avatarthumbnail.jpgYesterday I wrote the latest post in which I laid out a fairly clear, decisive plan if you’re a Canadian looking to purchase real estate in Phoenix or elsewhere in the United States. And in truth, the idea of setting some parameters which, if met, would signal the time to purchase applies to everyone.

The post was direct and with purpose – the truth about someday, as in “we’re thinking about buying a home somewhere down the line,” is someday never comes.

When you’re purchase is framed in terms of someday, there always will be a reason not to purchase preventing you from pulling the trigger – an interest rate higher than what it had been a couple of months earlier, fear that the market will continue to fall, remorse that the bottom finally arrived and now prices are moving higher (not happening yet, by the way, but mentioned for point of illustration), the economy’s iffy, the economy can’t sustain itself, and so on and so on and so on.

And you know what? That line of thinking is perfectly fine as long as you’re aware that you’re probably not going to buy. That’s fine. You’re allowed.

But if you really do want to purchase a home, whether as a first-time buyer looking at a bank owned home or as a Canadian or retiree looking for a second home, you need to decide what “the right time” will look like:

  • Where will interest rates need to be?
  • Where will prices need to be? (Note: this is a specific number, not the ubiquitous and nebulous “when we hit bottom” because you’ll not know the bottom until it’s gone.)
  • What will I need to have saved?
  • What do I want to see from the economy?
  • If you’re Canadian, what will the exchange rate be?

If you’re answer is “better”, ask yourself what “better” means. And keep asking until you come up with a specific answer.

For instance, let’s say you did this exercise a few weeks back when interest rates were in the low fives and you decided you wanted a rate less than five. Guess what? We’re there at the moment. If you’re waiting for “better”, what will that look like? And will you be ready if and when it happens?

The same goes for the exchange rate. Clearly 79 cents isn’t good so let’s say you want better. You need to know what that number is. 85 cents would be quite a bit better. If you’re holding out for 90 cents, it may or may not happen, but if it does will you be ready?

My entire point is that all of us ought to have honest conversations with ourselves. If you just want to look at pictures of homes, that’s fine with me. I have plenty of pictures for you to view. But if you really want to purchase when the timing’s right, take a few minutes and sit down now to decide what “right” really will mean.

That’s the only way you’ll be ready when the moment strikes.

[tags]Phoenix real estate[/tags]

About Jonathan

Jonathan Dalton is a 30-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

  • Mark

    JD,
    All very valid points- have you also examined baselines on when it’s worth your while to continue catering to the Canadian audience/investor? I would think the southward flow of our Canadian dollars has dropped off in unison with the exchange rate.

    When I visited you last on your turf, we’d talked about you putting together a guideline for Canadians that would walk us through every step of the American home-buying process from a foreign perspective… with the bottom line being-” how much is this gonna cost us above and beyond the actual sales price?”. For further clarity, it would be very helpful to use actual examples- say metrics based upon a negotiated REO single family home priced at $200K. My apologies if you’ve already done this (on a related sidenote Jonathan, your archives tool really sucks- sorry!) but I could not do a quick scan of articles you’d previously contributed. (I also noticed your archives do not have a “submit comment” component which may be helpful to bring older, pertinent strings back to life.)

    What I’d also be very interested in is not only the process (and constituent costs) of the home-buying event…. but just as importantly, ongoing maintenance considerations/costs AND what occurs when it comes time to sell our investment. You could probably do a multi-part series on this… again, only if you see this as an investment in your time and energies.

    One other area of note that I hope you might be able to help with is Phoenix-area golf communities. Can you shed light on the top golf course communities in the various quadrants of the Valley. Would be great to know what average/median home values are at (and were at), how much it costs to get onto courses in high and low seasons, and how difficult it is to get on courses for non-members. If I’m investing in a golf course community and catering to the Vacation Rental market, I want to ensure that I’m marketing my golf property in an area that’s friendly to outsiders

    FYI- I’ll be down again in early March… will look forward to connecting!

    Thanks_ Mark

  • So, Mrs. Lincoln, how’d you like the show?

    I’ve added the search widget back in. It’s a bit pokey and it’s a bit hidden but until I find a better WP solution, it is what it is. And I do need to find something better.

    One of the challenges with the “how much will this cost above and beyond” concept is that the costs can vary widely depending on what is purchased and how it’s used. Will you have a landscaper (not needed in a condo), if you have a pool will you have scheduled pool maintenace, what level of regular repairs would be needed on a home built in 2004 versus 1989 … if you’re using the property as a vacation rental, how much would your costs be compared to a year-round rental.

    With all of these variables, it’s difficult to come up with any sort of coherent answer as to what is to be expected. It will depend on your own usage, on the people you rent to, on the property itself, etc. Ballparking might be helpful except it leaves me open to people who come back and say “you said it only would cost x.” Which might have been true had the hot water heater not given out and leaked all over, know what I mean?

    On the golf course communities, what do you mean by “top”? This is one of the areas where the Fair Housing Act and its prohibition on steering buyers toward or away from any given area comes into play. Top can mean many different things, some of which are areas I can’t legally discuss.

    First point last … the reason I keep writing for Canadians is I’m still receiving inquiries on a daily basis from north of the border. The exchange rate isn’t what it was, but the decline in prices here in Arizona combined with the near-perfect weather for those who wish to escape the snow drifts in the winter, has kept interest relatively high.

    The question is converting interest into action. And that’s where some of the questions come into play … it doesn’t work for you when the CAD is at 80 cents, but what about 85? Is the interest based solely on dollars at parity which is unlikely to come back? That sort of thing …

    Looking forward to seeing you, too!