Buy in haste, repent at (miserable) leisure

(NYTIMES) - For nearly two years, home buyers in the United States 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 Ms Marilyn Wilson, a founding partner of consumer research company Wav Group, 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 Covid-19 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.

The Zillow survey findings paint a picture of home owners 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 per cent wish the home they bought was bigger and 21 per cent thought they overpaid.

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.

Ms Celeste Mohan and Mr Zach Flynn did not set out to buy a farmhouse with a barn and two cows. But after losing a bidding war for a rundown house in Boca Raton, Florida, the couple jumped on the 2,660 sq ft house in Lake Wales, a town of 16,000 about an hour from Orlando. They bought it in July for US$349,000 (S$468,000).

Ms Mohan, 25, and Mr Flynn, 29, a teacher, felt pressured to buy because the rent on their one-bedroom unit in Boca Raton was about to jump 22 per cent, to US$1,900 a month. With their US$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 2ha 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, they regretted their decision. The property felt eerily quiet and isolated, and maintaining the land and two cows was much more work than they had anticipated. "You see these people on Instagram with their farm life," she 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 neighbour, 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," she said.

They married in December and are expecting a baby in March, adding to their financial stress.

Three months into the pandemic in 2020, Ms Stephanie DiSantis felt claustrophobic working from home in her 800 sq ft town house in Seattle. So she started looking for a bigger space. She set her maximum budget at US$900,000 but soon had to push this up to US$1.3 million if she wanted to remain in the central neighbourhood.

While Ms DiSantis, 47, who works for Amazon, was in Massachusetts visiting family for a month, the list price of a 2,570 sq ft house dropped to US$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.

"When I first saw it, I cried," she said of the house with views of Puget Sound. "I fell in love." The house gave her more space, but at a significant financial cost. Last year, 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 town house, 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."

When Mr Travis Parman got a new job in Lexington, Kentucky, he figured the housing market there would be more forgiving than the one in Nashville, Tennessee, 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 found out was that Lexington tends to be low on inventory."

With a budget of US$1 million, he found a 3,600 sq ft house in a historic neighbourhood 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 needed only modest upgrades, the types of improvements that let a home owner put his own stamp on a space. He closed in January 2021, figuring the renovations would take three months.

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 US$5,000. The spring revealed a dead 100-year-old pin oak on the property, another US$5,000 bill, although the city shared in the cost of removal.

His list of simple upgrades to the decor 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.