The concept of a “forever home” is a rather romantic notion, a phrase likely conjured up by some enterprising real estate agent tugging at the heartstrings of buyers. Often synonymous with “dream home,” a forever home has all the room you need and the features you want. In short: Put away those boxes and that roll of packing tape for good, because you’ve just moved for the very last time.
If you’re feeling snarky, you might be thinking, “Forever home? Let’s hope it has a forever roof!” (Fair enough — new roofs are expensive.) Then at least consider a forever home to be the opposite of a starter home, which is typically a smaller, cheaper home that might be in need of some (or a lot) of work.
But when the market is as hot as it is now, many are putting their dream of a forever home on hold, or they are at least rethinking it.
When “Forever” Becomes “For Now”
It’s a tough time for many buyers to entertain the idea of a move when there’s limited inventory at sky-high prices. As a result, many homeowners might instead be looking to renovate a starter home, embracing the idea of a “for now home.”
“Right now, the idea of getting a forever home isn’t really the case,” says Bill Clarkson, a real estate agent with Century 21, Judge Fite Company, in Dallas. “It’s basically getting a house that you can [afford] because the market’s so crazy.”
Clarkson says that in his region, a forever home typically means more square footage and more land. He also mentions that a forever home could mean a property that is passed down from generation to generation because its location is such a valuable investment.
In most cases, it stands to reason that the more items a home can check off on a buyer’s wishlist, the more expensive it will be. On the flip side, if a house is smaller or deemed a “fixer-upper” in online listing parlance, it will be less expensive. But things are vastly different in the current market, where bidding wars are the norm.
“If the house is standing, it’s going to bring in multiple offers,” Clarkson says.
Does this mean you should give up on your forever home? Not quite, but it might be a good time to rethink your strategy, at least in the short term. Home buyers who hold off will likely have a better chance of jumping into the market when the Federal Reserve raises mortgage interest rates, says Clarkson. The rise in interest rates typically makes home prices go lower, but it does make it harder for people to qualify for mortgages.
“If you are willing to go above asking price and wait a couple years to build equity in the house, that’s what you’re going to have to do,” Clarkson says.
He talks with homebuyers about managing their expectations in a seller’s market, including what they should do, if anything, when a house they want already has multiple offers.
“I have a very serious conversation with them about how this may not be their market to buy a house,” Clarkson says.”