A buyer's market can be paralyzing for buyers who find themselves sitting on the sidelines even though they badly want to get in the game.

"I grew up in Virginia, and I have always loved the area of West Virginia. I bought a home in Manassas, VA, in February 2005. I was looking in West Virginia prior to purchasing the home, but I thought it was too far, being that I work in the district.

I do like the area that I currently live in, but I cannot seem to let go of a desire to live in West Virginia. And I have talked to people who take the marc train from West Virginia into the district for work. It doesn't seem that bad. Another plus to West Virginia is that I love horses, and from my research, I have already found the type of home that I would like to purchase that allows horses on the land in the Martinsburg area.

My problem is that the market appears to be a buyers market now, and since I have been in my house for just a little over a year, I do not have much equity as of yet. But I am also concerned about the housing prices going up in West Virginia. I would like to wait a couple of more years for my equity to grow and then purchase in West Virginia. I have also talked to a friend who suggested maybe just purchasing the land as of now. I would love to get your opinion.

I am just concerned that the prices will go up tremendously in the next couple of years or so. Do you have any suggestions for someone in my situation? Thank you for your help in advance."

-- Karimah

Realty Times replies:

When real estate sales soften, it seems like it might go on forever, but I can assure you, that with the in-migration and out-migration of people to DC, you probably have little to worry about. You will be able to sell your home eventually and probably at a nice profit.

Few people have enough equity in their homes after only a year to sell at a profit. That's why buying is such a big decision; you have to stay put for a few years to allow your home to beat inflation enough to make it worth your while to sell. The triple-digit gains of the last few years may be slowing, but that doesn't mean your appreciation is at a stand-still. Be patient.

Your problem is that you followed logic instead of your heart, and as you learned the hard way, you have some regrets. You wisely concluded that a home closer to DC would be the better investment, but now you wish you had followed your heart.

Would it help to know that you might have had buyer's remorse had you made a different choice?

The reason is that neither option gave you everything you wanted -- investment and lifestyle, so now you are looking for ways to buy the lifestyle you want. You didn't make the wrong choice, you simply made a choice.

I think you can have your intown home and horse farm, too, with a little patience and planning.

Housing markets tend to follow the leader -- if things are slowing down in the DC area, they'll soon slow down even more in the bedroom communities, so I don't think you need worry that Martinsburg will suddenly become unaffordable while DC home values remain flat. It's more likely that DC will lift interest in Martinsburg than the other way around.

One condition that's very much to your advantage is that a buyer's market is the perfect time to make your move because the selection is better than at any other time. You'll have your pick of properties.

If money is an issue, your friend's suggestion that you purchase a tract of land may be the wisest course of action, but only if this tract makes your heart burst with joy with the views and the possibilities. Only then will it be a pleasure, not a burden, to write your mortgage check each month. You can always park a trailer on the land and visit your horses until you build a permanent home.

In a buyer's market, it's easier to negotiate with sellers to carry the financing -- that way you won't have to qualify for another mortgage with a lender. The seller can carry your note, and collect a finance charge, and everybody's happy.

Another option is to live in your DC home another year until you've been a resident two full years. That way, you can rent the property for three more years, which allows you to continue to build equity. If you sell it after five years, you can keep all the capital gains up to $250,000 (singles) or $500,000 (marrieds.) Or you may find it best to hold the DC-area property for decades. If your home has appreciated significantly, you can take some cash out to buy your Martinsburg dream home and own two properties simultaneously.

It's about risk and reward. How much risk are you willing to take to have the rewards of both intown and rural properties?

Published: August 8, 2006

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