Why I’m not buying a condo in Dallas (yet)

My morning dog walks are lined with scaffolding.

New condos, townhouses, and apartment buildings are springing up throughout my neighborhood. The vast majority of these are insanely expensive luxury developments.

Rents are also jumping, despite the glut of cookie-cutter buildings.

Perhaps new arrivals like myself are out-pacing the building crews.

I fret about buying a home every few years.

Although I got priced out of Lowertown, St. Paul, I am not in a rush to buy in Dallas for several reasons:

1. I’m single

Buying as a single person seems like a terrible idea. Am I supposed to rent to my future partner? What type of dynamic does that set up? What if I meet someone who already owns?

Also, Home Depot trips don’t make for the most exciting date conversations.

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2. I’m too risk-adverse

I have several friends and coworkers who purchased older homes that turned out to be money pits.

For example, my coworker’s basement recently flooded after a pump gave out. She spent the whole weekend mopping, and may have some mold and structural issues to worry about now.

Apparently $5,000 gutters are also a thing in her neighborhood.

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3. Community isn’t that important to me (yet)

I think this will change once I have kids, but I’m not particularly committed to any neighborhood in Dallas yet. Also, many of my homeowner friends deal with neighbors who are crazier than the people in my apartment building, so I’m not excited to deal with that yet.

I don’t mind moving to a cheaper neighborhood if I get priced out of my current area, but I think that’s a bigger concern if it means that your child has to change schools.

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4. Flexibility and convenience is important to me.

I never would have had my Dallas adventure if I purchased in Minnesota. The ability to pack up and chase opportunities elsewhere is nice, particularly as a single person.

Plus, I like not having to fix things or change light bulbs.

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5. The numbers don’t add up.

The most important reason why I’m not buying is because it doesn’t make financial sense. The conventional wisdom that it is “cheaper to buy” typically presupposes two things:

1. That you’re going to buy a home comparable to what you currently rent.
2. That you’re putting down 20%

I’m currently renting a small apartment in a new building full of amenities. A comparable condo unit likely doesn’t exist, and if it did, it would come with a hefty association fee.

Also, an apartment suitable for a single person with a minimalist lifestyle is not appropriate for a couple with a kid. So I would likely outgrow the unit before the typical 5-7 year mark for a mortgage to be “worth it.”
The down payment issue is also important – I could throw that 20% down payment into my 401k and get a better return on investment.
A starter FHA Loan with a 3.5% down payment front-loads the interest payments, meaning that I wouldn’t be financially better off if I sold within 5 years.

So I’m renting for a little bit longer. Hopefully the rent hike at the end of my lease isn’t too bad.