Buying in a Seller's Market

[Luis Pineda]

Hi All, 

I have recently been looking into buying my very first property ever. My plan is to use my VA home loan benefits to purchase a condo, since the prices of single-family homes are incredibly high, especially here in San Diego, and then after my year of occupancy rent it out and purchase another property. My concern is that if I buy in a market where prices are high, will I potentially lose money if housing prices drop?

[Will Fraser]

Hi @Luis Pineda, the good news I hear is that you're looking to purchase a place to RENT after you move out.  It doesn't matter if home VALUES drop in a year, but rather it matters what happens to the RENTS.  I would imagine that if SD prices drop then you will have a slight influx of new buyers in the buying pool who would otherwise be renting, but primarily a net influx of PEOPLE to the area, which bodes well for tenant demand.

TBH it doesn't matter one bit if you buy it at $600k and it is worth $300k the very next day, just as long as your rent covers your costs and/or you can come out of pocket for the difference you'll weather the storms until the next cycle up.\