For nearly two years, home buyers have been shopping in conditions ripe for regret. Prices have soared, inventory has plunged and competition has been brutal in markets across the country. With fixer-uppers fetching multiple offers, buyers must make snap decisions about what is often the biggest financial investment of their lives.
Invariably, someone makes a choice they wish they hadn’t.
“There are all kinds of craziness happening,” said Marilyn Wilson, a founding partner of the WAV Group, a consumer research company, who described open houses so crowded they felt like nightclubs, with buyers getting 15 minutes to tour a home. “Sometimes people don’t remember, did it have three bedrooms or four? You might get the house, but it might not be the house you want because you’re just in this desperate state.”
The pandemic has turned out to be a historically miserable time to buy a home. Many buyers entered the market looking for a home to solve some of the problems the pandemic created. They wanted more space for Zoom rooms and home gyms. They wanted bigger and better backyards to entertain outdoors.
These expectations ran headlong into the reality of shopping in a frenzied sellers’ market where the pickings were slim and the prices astronomical. Surveys by the WAV Group and Zillow found about three quarters of recent buyers expressed some regret. In the Zillow survey, released on Feb. 4, the findings paint a picture of homeowners second-guessing the choices they made and wishing they’d had more time, more patience or considered living somewhere else. About a third of respondents regret buying a house that needed more work than they anticipated, 31 percent wish the home they bought was bigger and 21 percent thought they overpaid.
“Pandemic era buyers faced unprecedented conditions, they had far fewer homes to choose from, they had far more competition for the homes that were for sale,” said Amanda Pendleton, Zillow’s home trends expert. “A lot of buyers ended up in this home that was maybe not what they expected.”
Buyers stepping into the 2022 market have much to learn from those who shopped before them. Market forecasts predict that conditions won’t change significantly this spring. If anything, they might get tougher. At the end of December, inventory fell to a record low, according to the National Association of Realtors. Zillow projects that home prices will rise another 16 percent in 2022, on top of the 20 percent rise in 2021. Rising interest rates will likely push some buyers out of the market, but they could be replaced with others looking to escape rising rents or shoppers who sat on the sidelines last year, waiting for some stability.
Many successful buyers ended up with homes that they liked, and are happy to own a place. For some of them, that meant making an offer that managed to stand out in a bidding war. For others, it meant recalibrating their expectations during their search to avoid disappointment.
Recent buyers — those who are remorseful and others who are content with their homes — have some sage advice about how they would do it differently if they had to do it all over again.
The Risk of the Impulse Buy
Celeste Mohan and Zach Flynn did not set out to buy a farmhouse with a barn and two cows. But after they lost a bidding war for a rundown house in Boca Raton, Fla., the couple jumped on the 2,660-square-foot house in Lake Wales, a town of 16,000 about an hour from Orlando. They bought it last July for $349,000.
Ms. Mohan, 25, and Mr. Flynn, 29, a teacher, felt pressured to buy because the rent on their one-bedroom in Boca Raton was about to jump 22 percent, to $1,900 a month. With their $400,000 budget, their options were restricted to fixer-uppers, with fierce competition. After their bidding war defeat, the couple headed for the country. The farmhouse, set on five acres on a lake, seemed like an ideal alternative: quiet, pastoral, and charming.
“There really wasn’t much hesitation at that point. We’re defeated, we’re exhausted, we’re anxious,” said Ms. Mohan, a curriculum developer for an educational company. “We really just wanted to own a house.”
Almost immediately, the couple regretted their decision. The property felt eerily quiet and isolated, and maintaining five acres and two cows was more work than they anticipated. “You see these people on Instagram with their farm life,” Ms. Mohan said. “Nobody tells you what actual hard work that is and how time consuming it is.”
Before the summer ended, the couple had given the cows to the neighbor, had moved back to Boca Raton and rented a new apartment. Rather than try to sell the farmhouse, they hope to turn it into an Airbnb. “Right now we’re paying rent and a mortgage, which is really uncomfortable,” Ms. Mohan said. They married in December and are expecting a baby in March, adding to their financial stress.
What they wanted: A three-bedroom house in Boca Ratonfor under $400,000
What they bought: A three-bedroom farmhouse in Lake Walesfor $349,000
What they learned: In hindsight, Ms. Mohan wishes she and Mr. Flynn had spent more time evaluating their goals before giving up on Boca Raton. If they had been more clear on what they wanted, they would have known that their wish list included staying in a younger, livelier community. “I also would’ve told myself and Zach to honestly try harder for a house in Boca and to not get so worried about the competition,” she said.
The Cost of Being House Poor
Three months into the pandemic, Stephanie DiSantis felt claustrophobic working from home in her 800-square-foot townhouse in the Queen Anne neighborhood of Seattle.
So, like millions of other Americans, she started looking for a bigger space. She set her maximum budget at $900,000, but soon realized that if she wanted to stay in the central neighborhood, she would have to pay more. She pushed her budget up to $1.3 million, reassessing her priorities.
“I decided, I’ve done a lot of traveling, I’ve had a lot of fun. I’ve done the thing where I’m like, ‘I’m hungry for pasta, I’m going to go to Rome for three days,’” said Ms. DiSantis, 47, who works for Amazon. “I can stop doing that. I can afford to be a little house poor.”
In October 2021, while she was in Massachusetts visiting family for a month, a 2,570-square-foot house dropped the list price to $1.45 million, over her maximum budget, but within reach. After her friends, her broker and an inspector vetted it in her absence, her offer at full asking price was accepted.
She returned to Seattle in November, seeing the house she’d only seen on video in person for the first time. “When I first saw it, I cried,” she said of the house with views of the Puget Sound. “I fell in love.”
The house gave her more space, but at a significant financial cost. In 2021, her priorities shifted, and she suddenly felt the burden of a huge mortgage. “I got super burned out at work,” she said. “I remember thinking, ‘Man, if I was still in that townhouse, I could just quit my job for a year and be fine.’ The mortgage was so low, I could take a year off, I could relax, I could refuel and now I really can’t. ”
What she wanted: A three-bedroom house in Seattle for $900,000.
What she bought: A three-bedroom house in Seattle for $1.45 million.
What she learned: When Ms. DiSantis calculated her budget, she did not anticipate how a large mortgage would limit her future options. “I wish that I would have been able to foresee a couple of years down the road and waited it out,” she said. “I could have taken a big break or been that person who’s like, ‘OK, I’ll move to Montana and get a house that is everything I want for half the price.’”
More Work Than Expected
When Travis Parman got a new job in Lexington, Ky., he figured the housing market there would be more forgiving than the one in Nashville, where he had been living. “I thought it would be cheap and easy,” said Mr. Parman, 49, who started his job at AppHarvest, a tech start-up, in November 2020. “What I actually found out was that Lexington tends to be low on inventory.”
Mr. Parman started his search in November 2020. His husband, Andrew Kung, 43, a surgeon with the Navy, lives on a military base in Jacksonville, N.C., visiting on weekends. With a budget of $1 million, Mr. Parman imagined that he could find a picturesque historic property to be his forever home. Instead, he found extremely limited options. And the properties that were available were a far cry from the stately homes he envisioned.
“I walked into a lot of situations that were disasters,” he said.
Frustrated, he reset his expectations. Rather than look for the perfect home, he would find one that could work for the next five years. In a few years, when the market cooled, he could reassess. “The compromise that I made was really saying: ‘This is going to require a renovation, but it’s cosmetic,’” he said.
With a more measured goal in mind, he found a 3,600-square-foot four square style house in a historic neighborhood close enough to the office that he could bike to work. With canary yellow walls, dated track lighting and decorative kitchen tiles adorned with herbs, it seemed like a house that only needed modest upgrades, the types of improvements that let a homeowner put their own stamp on a space. He closed in January 2021, figuring the renovations would take three months.
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But not all repairs are immediately visible, or caught during an inspection. By summer, the central air conditioning, which was 20 years old, failed. Replacing it cost $5,000. The spring revealed a dead 100-year-old pin oak on the property, another $5,000 bill, although the city shared in the cost of removal.
His list of simple upgrades to the décor collided with pandemic delays and cost increases. He struggled to find dining tables, light fixtures and wall coverings. “We wound up having to, in many cases, choose second, third or fourth options because materials or pieces just weren’t available,” he said. The three-month job has stretched to nearly a year.
What he wanted: A historic home in excellent condition Lexington for under $1 million
What he bought: A four-bedroom home in need of repairs in Lexington for $653,000
What he learned: Mr. Parman learned that even minor improvements can take longer than expected, and not all larger problems are immediately apparent. In hindsight, he said he wished he’d researched the life span of the mechanicals, like the air conditioning, to avoid unexpected bills.
However, he found that by lowering his expectations for the kind of home he needed, he was able to find something that he could live with for the next few years.
“This does not have to be your forever home,” he said. “This does not have to be perfect.”
It just has to work for now.
Learning Your Limits
After spending almost a year traveling through Mexico and Costa Rica, Steph Vaye returned to New York in September 2021 eager to buy an apartment. She had two requirements: the apartment had to be in Williamsburg, Brooklyn, and it could not be a studio.
Three days after Ms. Vaye, 29, started her search, an apartment came on the market that checked all her boxes. Listed for $599,000, it had an open kitchen and a large balcony. “This was a dream apartment,” she said.
She offered the full asking price, but with multiple offers already on the table, she bumped hers up to $655,000, over her $650,000 budget. Her offer was rejected anyway.
“I’m a single woman. I was competing against couples who might have double my income,” said Ms. Vaye, who works for, nate, a shopping app.
The first rejection motivated her. “Once you start looking, it becomes an addiction and you just want to move,” she said.
Her broker, Molly Franklin, a saleswoman at Corcoran, showed her six more apartments in Williamsburg, and she bid on three. Two needed work. The third, at 484 square feet, was tiny, far smaller than any of the other options. But it had a balcony and was in a luxury building with an elevator, roof deck and a swimming pool.
“I had this expectation of the size of my apartment,” she said. “I thought it was going to be larger.”
Listed for $569,000, the apartment was well within her budget. Unlike the other options, it did not need work. She initially thought she’d be willing to renovate, but once the options were in front of her, she realized she wasn’t up for the work. “I was not prepared to remodel,” she said. “I needed something that was turnkey.”
She decided she could live with the tiny size because the apartment had an open floor plan, storage space and the amenities gave her options to entertain elsewhere. She closed on the apartment in November 2021.
What she wanted: A one-bedroom apartment in Williamsburg for under $650,000.
What she bought: A one-bedroom apartment in Williamsburg for $569,000.
What she learned: Ultimately, Ms. Vaye realized that staying well within her budget was a top priority, even if it meant she would have to pare down her belongings to live in a much smaller space. By choosing a home that didn’t need any repairs, she had the money to decorate immediately, adding new wallpaper and painting the space. “That was the really fun part,” she said. “I was really able to make it a home.”
https://www.nytimes.com/2022/02/04/realestate/home-buying-regret.html They Rushed to Buy in the Pandemic. Here’s What They Would Change.