This could be a matter of semantics but it also could be the mindset that helped contribute to the unprecedented increase in the value of Northern Virginia real estate between the years 2001-2005.
A HOUSE is not the same as a HOME. A house is a place where you may hang your hat for a little while but you don’t buy it with the intention of every staying (or maybe ever moving in) for any length of time. It is purchased with the idea that there is money to be made. You use your 8-Ball to try and figure out the top of the market and then if you are lucky you SELL at the TOP. You most likely use a 100% ARM loan because you plan on being long gone before the loan adjusted or needed to be converted to a fixed rate loan.
This was the new mindset in the Northern Virginia real estate market for 4 spectacular years. Our area which has for the most part been fortunate to have steady housing appreciation or at the worst a flat line as we saw during the 90’s, is now feeling the effects of the change in home buyer behavior. So now the question buyers have to ask themselves is are they buying a HOUSE or are they buying a HOME?
In our current market if you are looking to buy a HOUSE then you need to sit back, take a deep breath and think seriously about what you are doing. Buying a HOUSE means you need to think about capitalization rates, federal recapture rates, appreciation of assets vs. bank rate of return, rental rates and much more.
If you are buying a HOME then you need to imagine yourself living in the property for 7-10 years, deciding whether the neighborhood is one that you can see yourself in for an extended period of time, know whether the loan you are getting is one that you can afford for a longer period of time and being prepared to understand that even though the housing market is still uncertain the history of Northern Virginia has proven that if you sit tight it does recover.
So don’t confuse a HOUSE with a HOME. It is always a great time to own a HOME. Now may not be a great time to buy a HOUSE.