Location has always been an important factor when buying a home. Can the children go to school? And is the school good? Is there public transport nearby? How far to the grocery store? Can i go to work quickly?
This last question may be contentious for people who want and can work from home once the pandemic wears off. Your walk is steps from the kitchen or maybe your desk is in the kitchen and you can live anywhere in the country. This destroys the traditional idea of a wide-open location.
In addition to location, size / style, property prices, down payment, interest rates and monthly payments, there are now other factors to consider. Remote working triggered by the pandemic is one of them, but the global health crisis has also reversed the trend in smaller places. Home office space is now on the wish lists of many buyers. Zillow reported in December 2020 that 48% more of its offers announced a “home office” or a “zoom room”.
Despite the addition of these factors, home ownership remains a stable investment because the money you spend on rent instead goes to lower your mortgage and increase your true ownership of the property you have chosen. Mortgage rates are low for now, but so is inventory, and in most areas that means prices are high.
There are four financial questions You should answer before buying a home. But there are other considerations as well. Think about which of the following applies to you and how this affects your purchase decision.
Location, location, location
In most cases, buying a home requires some gainful employment and you (and possibly your spouse or partner) do. Another important consideration for homebuyers prior to the pandemic was the location of the new home in relation to their place of work, or even the characteristics of the neighborhood.
But during the pandemic, many people worked from home (if they were lucky enough to keep their jobs going). Twenty years ago it was a good location for a home near work.
A decade ago, remote working was seen as a positive benefit stemming from digital communication (with stories of adventurous guys, especially technicians taking their work with them to tropical areas), but remote working became a necessity in 2020.
The meaning of place, place, place has changed.
In May 2021, some companies welcomed employees back to protected office environments, while other employees a Hybrid of in-office and home situations. Still others, realizing that they exist and could benefit from all-remote workers, are closing their physical offices or reducing their office space significantly.
Regarding your own work situation, you may not need to be anywhere near your office anymore. How close do you need to be if you only go to the office twice a week?
And how solid is your current employment status? If you make a home buying decision based on the location in relation to your employment situation, will you stay in that position and with this company for a long time? Does this play a role in your decision to buy a home?
How much space do you need?
Before the pandemic, your living space appeared to be adequate. But when it became necessary to create a viable job in your home, the house suddenly became tiny. If you lived with someone else who worked from home, two workspaces were required. Your home became the place where you ate, slept, and watched, as well as your office and, in some cases, a classroom for children.
For years there has been a trend towards smaller, more efficient and more environmentally friendly houses. They might not all be tiny houses, but they were smaller. In 2021, the National Association of Home Builders reported more interest in bigger homes – people want space.
Will your home be your office in the future? Will there be occasions when several people have to work at home at the same time and is one of you willing to use the kitchen, basement or garage as a makeshift office?
If you need more space in your new home for remote employment situations to work, you need to balance your space requirements with your budget for a mortgage. (Lucky for buyers that interest rates are low. It’s unhappy for buyers that inventory is also low and sellers enjoy higher prices.) This could require moving farther from an urban setting to a suburb with size Finding the house fits the size of your budget.
But this consideration then comes upside down with another consideration …
What about climate change?
For decades, proximity to the water, especially the coast, was desirable, if not always financially achievable. But climate change and rising water temperatures have made life on the coast too risky for some, as severe storms and floods have become more common in these areas. Areas prone to forest fires will also be more carefully screened.
These are extreme situations, but a current survey Published on Stanford.edu, 68% of millennials, the oldest of whom will turn 40 this year, are keen to shop and live in areas less known for natural disasters.
Transportation is another problem. The further you are from an urban setting, the more you will likely need to use your car. Many young adults today prefer the climate-friendly urban lifestyle of using public transport to get around rather than owning a vehicle.
However, this may not be an option if the other considerations (space, budget) force you to move to the suburbs.
If you work remotely and don’t need a car to get to your office, an urban location might still be planned depending on how much space you need.
Timing is everything
With all of the above thoughts on your mind, there is one other thing you need to consider and that is timing. When do you need to make a decision about buying a home?
Although today’s demand far outweighs supply and gives sellers a financial advantage over buyers, mortgage rates remain very low. If you need a mortgage to buy your home, now is the time to get one if you want to qualify. Online shopping for mortgage rates can be the smart choice.
The Federal Reserve Board has announced that it will no federal rate hike until at least 2022, but the American economy is expected to continue growing in the post-pandemic climate. Such growth could lead to interest rate hikes over the next year to protect against inflation. One thing seems certain, if you need to buy a home and cost is an issue, now is the time to do it.
Don’t you hate it when your parents’ advice turns out to be right?
You need a Pros and cons list. You actually need more than a list of advantages and disadvantages (location, space, costs, transport). And you need a list of priorities.
- Do I have to buy a house now?
- Do I have to live in a certain place?
- Will I be working from home, in an office, or in a hybrid situation?
- How much space do I / we need?
- Which of the above factors take precedence?
The decision to buy a home is one of the biggest of your life. With the pandemic, climate issues and remote working opportunities, it’s gotten more complicated than ever.
Kent McDill is a seasoned journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.
This article originally appeared on www.thepennyhoarder.com