How long should you plan to live in your first home?
Here’s an interesting statistic. When surveyed, 1000 first time home buyers said that they anticipated living in their first home for a total of 10 years. In a similar survey, 1000 first time home sellers (meaning that they were currently living in their first home) were selling the home after an average of only 4.5 years of ownership.
I think that this is a really informative survey, and over the years, I’ve found these results to be pretty consistent with what I’ve seen from my clients. Most first time home buyers think they are going be in their first home for a longer period than they actually wind up living there. Why is this? Life changes! Generally, as one gets older, other things come into play. Families grow, jobs get relocated, salaries go up, etc.,etc.
One of the things that we really stress to our first time home buyers, is that they really shouldn’t try to plan for anything more than 5 years out. The reality is that anything over 5 years is way too difficult to anticipate or predict.
Here’s an example. If you are buying your first home, and you and your spouse think that you are a full two years from having your first child, then I’d definitely suggest that you don’t focus too much on worrying about schools. Statistics say that you won’t even be living in that home by the time your kids are old enough for school AND even if you do wind up living there that long, there is no way to predict whether a specific school will still have as high of rankings in 8 years, as it does now.
For most people, a first home isn’t their dream home that they want to spend the rest of their life in. Instead, it’s a “stepping stone,” that helps get them to their dream home. Most of our clients, who buy today, will be in a better economic condition in 5 years. Most of them will be making more money AND they will be able to use the appreciation from their first home as the investment vehicle that allows them to buy a nicer home. That’s something we really stress to most of our buyers. You almost definitely have to make some sacrifices with your first home, whether it’s location, condition, size, etc., BUT with the money you make from the appreciation of the home, you’ll find that you have enough money to go out and buy something much better for your second home.