TimothySaffles.com

Unless you have lived under the proverbial rock for the last year, you may have noticed that housing prices throughout the country are plummeting. This is due to a number of reasons. From over-supply to over-inflation, there has been a price correction something akin to 15% conservatively here in PHX and the ‘burbs. As I am always looking for bargains, I was thinking about picking up another townhome/condo to live in.

If you are wondering, I already own one townhome but it is on the wrong side of town from my work and everyone should know how much I hate driving in rush hour traffic, particularly in this town, particularly with gas prices at their current levels. So I currently rent out the condo at just enough to cover my costs and rent a cheap apartment not too far from work.

With housing prices currently on the downswing, I have thought of picking up another place close to work so that I’m not just eating the rental money like miss Presley on an afternoon eating binge.

So I ran some numbers.

At my current income, with my bills all paid off, I am able to save a substantial amount of money. This is due, in the most part, to the fact that apartment living is super-cheap and I don’t have to heat/cool a massive house. Combine the cheap bills with the fact that I have no upkeep costs, and I’m almost rolling in dough.

In fact, I would have to gain a significant percentage per year on my initial house investment just to get back to zero. (My previous experience in the mortgage industry informed me that I will pay 12-18 percent above the house price in bank fees and commissions thus starting with a negative balance on investment).

So why would I buy a place? If I throw away all of the sentimental reasons, it doesn’t really make fiscal sense at this point. It does go against the Millionaire Next Door motto of buy and pay off your home. But I could theoretically save up enough money within the not too distant future and buy a small place for cash.

So I have a dilemma: I want to purchase a place of my own, I feel that there will be no better time that in the next year or so, but I don’t think it will be a worthwhile investment of capital or time. I’m torn between sentimentality and responsibility.