K. Williams, Home Buyer in Boiling Springs, PA

IS it smart to buy a house if I'm only going to live there for two years?

Asked by K. Williams, Boiling Springs, PA Wed Jan 7, 2009

I am moving to Cumberland County, PA (Boiling Springs/ Carlisle) and would like to be a first time home owner. Unfortunatlly my job is a two year term. Is it smart to buy a house, as I've heard I would loose money, especially with houses depreciating?

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James Gordon…, Agent, Hamilton, OH
Thu Jan 8, 2009
If you find the right house in the right area this could be a good time to purchase. I have a client that is also a loan officer for a major bank. He purchased a home 11 months ago and due to the current rates is going to refinance. He is getting all his ducks in a row so that he can close the loan on day 366. He just got his new appraisal back on 1/7/09 and it came in at 156K his purchase price was 137k. He had to call me and thank me for helping him find a home that went up 12% in one year in a down market.
Web Reference:  http://www.Find1Home.com
1 vote
Mim Heisey, , Shippensburg, PA
Thu Jan 8, 2009
You certainly have received a great response on this one! May I answer by asking you a few questions that you ought to consider before making a decision?

1) What is available to rent here in Carlisle that you would consider living in? At what rent?

2) How does rental cost compare to purchase of a similar property? did you factor in the tax benefits of homeownership? what about the closing costs of buying --spread over 2, 3 or 5 years?

3) Is your employer subsidizing your move? paying some or all of your closing costs? If they are, will they make a lump sum settlement to you if you do not buy, or is that money lost to you if you rent?

4) What is your risk tolerance? If it is not high you may consider rental more favorable, even in a stable, slowly increasing market.

5) Are you planning to take advantage of the great interest rates and minimum downpayments that are available now ? YES! THERE IS MONEY AVAILABLE IF YOU HAVE REASONABLY GOOD CREDIT!!

6) How sure are you that the job will end at 2 years?
7) Would you consider renting the property after you move from this area. (You might have a very attractive interest rate to carry the property on.:)

As an experienced Realtor here in the Cumberland Valley, I help my clients look at what is best for THEM, and that can only be done by asking the right questions and getting more facts of their situation than are included in this public forum.
Hope that helps. PLease call if you desire more assistance.
Mim Heisey
1 vote
Alan May, Agent, Evanston, IL
Thu Jan 8, 2009
No one, without a crystal ball, can answer this question with any certainty. But in my opinion, and that's all it is, "my opinion", today's market is to unsure, to plan on selling a home in two years, unless you can afford to take the loss.

And even if you can afford the loss... why would you? If you have a two year term, rental is a much more viable option.
1 vote
Tina D'Amato, Agent, Sciota, PA
Thu Jan 8, 2009
Hi Mr Williams,

All the answers already given were great ones! The only thought I had was if you were to buy a home that was a great deal now and stay in it for two years, would it be an option for you to rent the home after your done living in it. Chances are you would have made a great investment if you bought in todays market and kept it for 5-7 years.
1 vote
Eileen Musser…, Home Owner, York, PA
Wed Jan 7, 2009
Mr. Williams,

You are likely to get differing opinions on this one, but I would not suggest that you take that chance at this time unless you can buy a home that you can greatly improve without spending much money.

If you are able to find a reasonably priced home to rent, then you might very well be better off to rent right now.

Don't sound much like a Realtor, do I??

Even in periods of reasonable inflation it takes some time to recover the costs associated with buying and selling a home.

On the other hand, if you are conviced that the market is actually at its bottom and we are going to see rapid recovery within the next year, then don't let me discourage you. People who buy now are going to look VERY SMART when the market does eventually recover.

Can you tolerate the risk that the recovery will not come in time for you to come out ahead if you do have to sell your home two years for now?

Just be sure that if you rent, you put aside the difference between your rent and what you would have put into a house payment. The money you save could add up to a good down payment for you when you move on to your next assignment. At that time you can re-evaluate the prospects for the market.

FOR PEOPLE who are NOT going to plan to sell for a couple of years I DO think this is a great time to buy. If you buy before the middle of 2009, you may benefit from the tax credit that you will qualify for if you have not owned a home recently. Check out advice offered here on that subject in the last couple of months.

A home is a great place to build your nest. If you make a profit on it, that is a really nice bonus.

God Bless! I hope you feel comfortable with your decision.

Eileen's Green Team
1 vote
Erica Ramus,…, Agent, Pottsville, PA
Thu Oct 21, 2010
The answer depends on too many things! First if you are only living there for 2 years, you should make sure you get a good price (don't overpay). Then, who knows what the market will do in the next 2 years. If it goes up or holds steady you should be fine. If it drops, however, you might lose money.
0 votes
JPZ, , Harrisburg, PA
Thu Oct 21, 2010
I'm not a realtor. I'm in the same type of position as you. I expect to be here 3 years and I bought a home. Right now I believe I'm under water - 2 yrs in. But I love boiling springs!! 2 years ago the home prices were higher and I've lost a little on the home but probably not as much as I would've spent renting the same type home. Right now the prices are low - I doubt they'll drop much from here - so I really think in 2 more years you'll gain on your investment (says my crystal ball). Not many nice homes for rent. I think we'll consider keeping ours and renting when the time comes to transfer. With the Army college so close there's a good rental market for newer homes.
Good luck and welcome!
0 votes
Dorene Slavi…, Agent, Torrance, CA
Thu Jan 8, 2009
Dear K,
I probably would not buy right now if I were in your situation. Why not rent since you will only be in your job for two years? Once you settle down in a location where you will be for at least (5) years, that would be the time to purchase something.
Best of Luck to you!
Web Reference:  http://www.doreneslavitz.com
0 votes
Mim Heisey, , Shippensburg, PA
Thu Jan 8, 2009
re: "If you find the right house ..." that James posted: those things do happen.

A savvy buyer knows that the tiime to buy is when the market is at the bottom, because it has been going in up and down cycles for generations! If you look at history, we have been here before! This market correction is a little longer and larger because the upswing has been larger and longer! No one can guarentee you that this is the bottom in your situation but ...:) what is your risk tolerance??:)

Hope that helps and thanksto James for the post.
0 votes
SALLY OWEN, Agent, Watch Hill, RI
Thu Jan 8, 2009
I love Boiling Springs! I have spent many a wonderful weekend with friends at Allenberry! In this environment, it's most important to do what is right for you rather than having strangers make generalizations. We have no idea what your overall financial picture is, so we can't say. If the only question is will your investment increase in value enough in two years to recover not only your inital investment but plus the costs of the transactions? Probably not. However, if you are in the position to buy and have a future tenant carry the expenses of the property when you move on, it would be a legitimate part of a wealth building strategy. We will not know where the bottom of the market is until after it has passed so you have to look at the opportunities now. Interest rates are low, mortgage money is available, inventory is high...so maybe it boils down to how important is owning your own home to you.
0 votes
Bill Eckler, Agent, Venice, FL
Wed Jan 7, 2009
In the currnt uncertain market, for a duration of two years, renting may be the best option. But it depends on your situation, the individual buying opportunity, and its resale potential.
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Dallas Texas, Agent, Dallas, TN
Wed Jan 7, 2009
If you locate a home with equity great buy you receive tax benefits however keep in mind you have realtor fees, and closing costs when you sale home again. Could purchase an investment property lease out when you move.

Confer with CPA.
Web Reference:  http://www.lynn911.com
0 votes
Derek Joyner, , Winston Salem, NC
Wed Jan 7, 2009
I always say it is smart to buy and not rent. The first thing I would do is call a couple of agents in the area and ask them what the annual appreciation rate is for the area. Make sure you call a couple because I have seen many agents have different opinions about the appreciation of an area. Next, you would need to be careful and try to find something for a deal. Dont buy so much because you love the home. I would buy a foreclosure and work on it while you were in it. In 2 years sale it and hopefully make a little on it. Make sure to not go over board and spend so much on the home. Making a little would be better than making nothing in my opinion.
0 votes
Beth Masland, Agent, Camp Hill, PA
Wed Jan 7, 2009
K - No one can answer the question of whether a home will appreciate or depreciate over the next two years, but it is a really short term to buy and resell and still get all your costs of buying and selling out of the property. So if that is your intent, to resell at the end of the two year term, I would recommend renting and saving as much as possible for your future purchase. However, have you ever thought of being a landlord and using your first home purchase as an investment? By purchasing a home as a first time homebuyer, you can get some really good rates and terms - so long as your credit is good - even in this market. The prices are down a bit, but not drastically as in other parts of the country, AND interest rates are low. It is a fabulous time to buy. When you need to relocate at the end of your two years, you can turn it into a rental property and you are on your way to becoming a true real estate investor! If you choose to investigate this path, carefully consider what type of home to buy now, so that it becomes a good low maintenance rental later. There are many other considerations, if you are interested in investigating this further I suggest you contact me through the website below or another trusted Realtor you may know. Good luck what ever you decide! I own a rental in Boiling Springs, and it is a great community, as are the many surrounding communities. I've lived in Cumberland County all my life - its a great place - WELCOME to Central Pa!
Web Reference:  http://www.bethmasland.com
0 votes
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