Recently I've been thinking. With the move looming overhead, and the closing of a metaphoric chapter of my life upcoming, there is much cause for reflection on these last few years.
One of the things I've been reflective about has been our decision to rent rather than buy. In the "bull" market of E-town a couple of years ago, many of our friends tried to persuade Hubbs and I to purchase a home. The rationale was that we could, prior to a move, build up some equity and make some money before heading to Vancouver. Rather than "waste our money" with renting, we could have applied those monthly payments (along with our savings) towards a mortgage on our own home for a year or two, building sufficient profit on our property to pad our bank accounts for a move.
Of course, this advice was given a year or two ago, when home prices were reaching record-highs in E-town, and the oil industry was booming such that real estate was being snatched up within days (sometimes even hours) of listing, and demand far exceeded supply. People in general were becoming greedy at this seemingly prosperous point in time, borrowing equity from their homes to invest in additional properties, or constantly upgrading their homes and flipping for profit. You might even call these folks "pigs" in their earnest grab for quick and easy profit.
Of course, quite soon into these discussions with friends, I discovered myself to be a bit of a "bear." Whereas they focused on the then-current economic conditions, I chose to look at longer-term forecasts. Even in my ignorance about real estate and economics, I could foresee that the massive hikes in housing prices and economic upturns would be short-lived, and in short order supply would exceed demand again. They thought I was being overly-cautious. They laughed at our decision to rent. As it turns out, I was right.
Had we followed the advice of these well-intentioned others, Hubbs and I would be stuck right now with a property that would no longer be worth as much as what we would have paid for it when we bought it a mere year or two ago. We would need to eat the difference, and try to sell our home (at a loss) just so that we could move. We would therefore be unable to move when we wanted to, as the relocation would have to be tied to the sale of our home. The market is pretty saturated with listings right now, oil production has slowed to a crawl, and some people we know have been listed since the spring (with continuous drops in pricing) without even any lookers, much less takers.
In hindsight, it paid off for us to be a bear (or maybe a "chicken") and to wait it out these last few years without buying in. In the ebb and flow of economics, certain realities exist. A long term real estate investment will always yield positive returns provided one waits long enough; this is a universal truth. An economy will always swing back and forth between bear and bull; this is also a reality, although the duration of each respective term is relative to other social and economic factors at play in a given area. However, for us and our dream to eventually move to Vancouver, it seemed foolish to jump on the proverbial bandwagon for the relatively short-term, and pour all of our savings into a real estate market that was especially volatile and unpredictable in our area.
So to all those who thought we were being foolish in dumping all our money into rent rather than a mortgage, I guess I can finally say, "I told you so." Because we chose to rent, we are now free to move whenever we want, and our assets are not tied up in a mortgage. We are not facing the stress of having our home be valued at less than what we purchased it for, and we don't have to worry about trying to unload our property before we can go.