Q: When buying a first home, is it important to assess if the market is in a bubble, or just buy and go with it?
A: In my 28 years as a Realtor, I’ve watched at least half a dozen would-be buyers struggle with the bubble question. They waited for a clear sign that we weren‘t in a bubble or that we were at the so-called bottom of the market.
I’ve seen them sitting on the sidelines in a runaway buyer’s market. I’ve witnessed them kicking themselves with regret in a seller’s market. I’ve watched them invest in the stock market instead and lose all their savings.
I’ve also seen them accidentally buy at just the right time and double their investment in 18 months.
Buying a home — especially in a place like San Francisco — takes a giant commitment and huge leap of faith. It’s beyond challenging to pony up the down payment required for a median priced home of $1,000,000. It’s nerve-wracking to contemplate making those mortgage payments. It’s frightening to think about when the next earthquake is coming.
I have tremendous compassion for potential buyers. Home ownership looks scary when you’ve been renting. But once you’ve closed and moved in, it feels normal.
There’s an old Realtor’s adage that goes like this: “Buyers Buy.” In other words, they don’t spend too much time hemming and hawing. They don’t analyze everything to the nth degree. They buy. Because if they don’t buy, they aren’t invested. And if they aren’t invested it doesn’t matter WHAT the market does.
My advice is to not worry about the bubble. Do your due diligence. Work with a professional agent. Plan on staying for at least five years. You’ll be okay.
For more on the subject of bubbles, click here.
This article first appeared as a Quora answer. Cynthia Cummins is a Top Producer and Partner at McGuire. For info on SF real estate visit CynthiaCummins.com. For more refreshing and humorous perspectives on residential real estate visit RealEstateTherapy.org.