Sometimes it is fairly easy to compromise. Maybe you aren’t all that invested in the outcome. Perhaps you’re compromising one thing to achieve another goal that is far more important. So many things affect the way we view a compromise.

As we move further into 2022, the home market is still predominantly a seller’s market. Not just here in Los Alamos, but everywhere. Analysts at Realtor.com predict that the available home inventory will grow an average of 0.3% this year. That might not seem like much, but every little bit helps the market loosen up. Here in Los Alamos, and all across the country.

When it comes to the question of whether or not it is time to stop paying rent and buy your own home, there are more than a few things you would want to consider. You might say you’ll need to consider more than one compromise as you navigate this important decision.

Rent vs Own

In the days of markets past, people rented a home for much less cash each month than they could purchase. It was a way for those who couldn’t come up with a large enough downpayment, (or the entire cash price back in our grandparents’ day), to live somewhere and save up enough money to purchase their own home.

Modern times have seen a shift in the cost of renting that is a direct result of the supply/demand issues of housing. Now, depending upon where you live, you’re probably going to pay more money in rent than you would if you were paying on a low interest mortgage. While you still might have difficulty coming up with a down payment, there are first time homebuyer incentives that could still make purchasing possible.

However, be real with yourself about the cost of owning a home. Do your research! Here in Los Alamos, you might not prefer the idea of moving into one of the new apartments going up in several locations around town or paying what seems like a lot of cash each month to rent a Group 11 Quad or a Group 13 Duplex. It might seem like a waste of money to pay your landlord’s mortgage instead of building equity in your own home.

If you’re the sort of person who loves new, then the homes that are most likely to fit your preferences are in Mirador down in White Rock. The homes are new, and therefore likely to have less in the way of maintenance or renovations necessary, but you’re still going to be paying a premium on top of your mortgage payment because of the public improvement district cost associated with that subdivision. If you’re not familiar with that term, PID, you can see a previous post here. The bottom line is that you’re going to have an extra $200 on top of your mortgage payment to pay toward your living expenses. If you add in the cost of yard upkeep, home maintenance, and anything inside that might need to be maintained, those dollars can really add up. It doesn’t take long for you to realize it might have been cheaper to rent that brand new apartment.

Even if you decide to purchase an older Quad or Duplex or even a home on Barranca Mesa, North Mesa, or White Rock, most of those were built in the 50s, 60s, and 70s. I can tell you from experience that a good number of them require a lot of renovation to bring them up to date. They’re fantastic homes with a lot to offer, but there’s a good chance you’re going to find hidden costs to home ownership that you never dreamed of when you were renting.

Remember, when you’re the homeowner, there is nobody to call in the event of a furnace malfunction, a total breakdown of your swamp cooler, or a clogged drain or toilet. There isn’t a landlord to replace an appliance, repair door knobs, or even do simple things like make sure the bathtub is well sealed so it isn’t leaking. And if it is leaking because of a breakdown in maintenance schedules, the landlord is the one responsible. If you’re the landlord, those costs can quickly add up.

How Handy Are YOU?

A lot of my homebuyers are DIY types. And if you’re the sort of person who can look at a list of small repairs and reach for a wrench, then this might not be such a big deal for you. But if you’re all thumbs when it comes to a screwdriver and you don’t know the difference between drywall and sheet metal screws, you might want to consider carefully before you take the plunge into home ownership. It might be less costly to rent until you’re ready to step into a new home where home maintenance is very basic.

What Happened to Starter Homes?

This is something that we just don’t hear about all that often anymore. To some degree, the concept of the starter home has been affected by the rising cost of housing in general. Essentially, if people are going to spend that much money each month on a place to live, they want it to be exactly what they want.

Think of it like this. If you just need a car to get from point A to point B and you only spend a short period of time in that car each day, you’re probably not going to spring for the luxury automobile. You’re going to go for the compact, commuter vehicle with basic features and a much more manageable price tag.

But even in the car industry we’ve seen this shifting. “Starter cars” are filled with bluetooth capability and heated seats when we used to only see that on high end vehicles that came with a large price tag. Our expectations of everything are shifting too. As a culture, we expect things to be made to order. But it just doesn’t work that way for everything.

Purchasing a home here in Los Alamos is very much a situation that calls for compromise. Apartment therapy.com calls it the 80/20 rule. If a potential home meets at least 80% of your list of features, then you should probably compromise and buy it. Depending upon your budget, you might even want to be more willing to compromise. When searching for your “starter home”, it might mean that your kids have to share a bedroom or you might not get that three car garage, (those are rather rare around here). Maybe you don’t get your spa inspired bathroom or your gourmet kitchen. But realistically, this doesn’t have to be your only home. Most homebuyers move every three to five years. Even here in Los Alamos. The market can shift based upon hiring and contracts at LANL. That means in five years you might be able to be a little more choosy, but you would still have your starter home to “trade in”. It could work as a solid investment for your next down payment on the home of your dreams. Or your dreams in five years…

Whatever your compromise, I’d love to talk with you! I’m Los Alamos Local and I love everything about real estate in this unique town. Give me a call and let’s talk compromises that might work for you!