Smart Borrower Center
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By Bridget Smith - Editor-in-Chief, Smart Borrower Center
That’s a question my husband and I have been struggling to answer for months now. We live in Charlotte, NC, and while home prices here have been going up, our market is still considered undervalued by many experts’ measurements. The problem is that when we look at neighborhoods we’d like to move to, we’re shocked by how much prices have jumped over the past two or three years. Is this really the right time to buy?
Homes in Charlotte that used to go for $300,000 a couple of years ago are now selling for $450,000. So, we worry -- if we don’t buy now, will prices keep climbing? Or would we be buying at the top of the market? And what about rates? We have an incredibly low mortgage payment right now -- less than $1,000 including insurance and taxes -- are we ready to give that up? But if we don’t move now, will we ever be able to afford to live in a decent school zone?
The most recent home we’ve been considering is a 1,850-square-foot ranch with three bedrooms and two full baths. The neighborhood isn’t much different from our current one, and while the junior high and high school are better, the elementary school (which would be the most important school consideration at this point) is not as good. So we’d be paying at least $100,000 more for a den, a full bath and one of the best high schools in the city. I’m not sure it’s worth it.
Some people in Charlotte would think we’re crazy -- for the same price as the house we’re thinking of buying we could buy new construction and get a 2,500-square-foot home. But we want an older, established neighborhood, and in Charlotte you pay a premium for that.
Our decision is complicated by our interest in local schools. Charlotte’s school-assignment system seems to change in some way every year. For the past five years, it has been a neighborhood system, which is one reason home prices in some areas have increased so dramatically. But I worry about paying a premium for schools only to have the school board vote in a different system down the road.
So where does that leave us? Here is what we are considering when we look at homes:
Interest rates and home prices are secondary considerations -- while they’re a factor, I can’t predict where the Charlotte market will go. So why worry? I figure by basing our decision of whether or not to move on factors we can control, we’re much more likely to make a wise move.