# Question for those that have been through the dips



## feetfats (Jan 3, 2013)

Here is the situation I am looking at.

Me and my wife and child have a house and mortgage that we live in, in a small town that I am very connected to. I have a very strong understanding of the local economy because I am very involved in it and I predict that jobs are going to dry up for a while with layoffs already starting. I believe that the housing market here is going to take a sharp and fast decline very soon. We are in that stage of calm water but there are still some house sales happening. 

We can hold the house and ride out the storm, or we can go through the huge hassle of selling, moving, and renting for a while (there are tons available already) and buying an even better place when the market is low. 

I've already been hit by a lay off (4 months ago) but I am not motivated by fear and instead am motivated by the opportunity to scoop up a deal. I am not worried about paying the mortgage for the next few years because I have money tucked aside. I predict large upside for this economy in the next 2-5 years.

So, what would you do and have you experienced anything similar?


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## MoreMiles (Apr 20, 2011)

My opinion is that if you do not want to move for at least 5 to 10 years, it doesn't matter what the price is. You should not treat your primary residence as an investable asset. Let's put it this way, what if something goes wrong after the move? You move to a bad neighbourhood? Your rental neighbours are on rental because they are from lower social economic class so the area is more occupied by complex depressed and drug dependent residents? They may influence your spouse and kids. You may save $50,000 but is your family wellness worth it? That is my opinion... maybe a biased one, but that would be my concern.


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## CrashTestSnoopy (Jan 21, 2015)

I agree with what MoreMiles said as I previously bought a place in a city that was more affordable but among people with lower income, unstable jobs. I would not want to do that again and risk the safety of my wife and I. Plus the commute was just brutal.

Also, since you mentioned you had been laid off, you should first check with the banks (not with the one you currently have a mortgage with) to see if you would even be qualified at this point as most lenders would not issue loans unless you can show a stable source of income (T4) regardless whether you can make the 20% downpayment and have additional savings. 

Check that first before you sell or you might be shooting yourself in the foot.


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## Rusty O'Toole (Feb 1, 2012)

Sit tight. I have been through the same thing with rental real estate and always regretted selling. It wasn't my giant brain that made me money it was sitting tight.

The expense and hassle is always more than you expect, and no one can time the market except by pure luck.

If you really feel confident in your ability to time the market, think of buying a rental house at the bottom. But ONLY if you can do so with a small down payment and positive cash flow. That way you can afford to hold onto it until it goes up a decent amount which can easily take 10 years.


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## Just a Guy (Mar 27, 2012)

You are already unemployed, the market is going to go south, and lending us already tight...you may not get a mortgage if you sell now and try to buy later. Iffy market and no income in a small town will tighten up the bank pretty quick. Just because you want to buy, doesn't mean the bank will want to lend you money.


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## feetfats (Jan 3, 2013)

I appreciate the points of view given here. I did forget about the possible reality of not having access to borrowed money during the dip if I am not working so that is a very important point, banks tend to like income . There are lots of homes available for rent in good areas here so I'm not really worried about safety. They would be a step down from the class level we currently enjoy but not a decline in safety in any way.

I'm pretty sure we are just going to sit tight. Too much hassle is the main reason. I am also pretty sure that the window of time to sell is just about over now anyways and I think the race down has begun. More layoffs were announced today.

A couple days ago I managed to get a job that will pay just enough for now and should hopefully turn into a career fairly quickly. It should have the ability to hold up during this recession but who really ever knows.


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## Rusty O'Toole (Feb 1, 2012)

I have seen the same situation in small towns where a big employer left town or laid everybody off, everyone predicted real estate would crash but it never did. Sales might slow down for a while but prices were hardly affected.

This was in a normal town not a one employer company town off in the boonies somewhere that only exists because of the mine or the mill. Those can turn into ghost towns but normal towns don't.


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