I have spend an extended amount of time over the last month in Excel® both for personal and professional purposes, and I do believe I run the risk of becoming permanently cross-eyed in the future. Not that I am not grateful to have them, indeed, I cannot even fathom a reversion to banging out repetitive calculations on a Casio scientific calculator. In fact, I have made somewhat of a point of beefing up my skill set when it comes to that venerable office staple. It really is a fantastic way to crunch a lot of data in a very short time span, once you have mastered its formula and macro system.
More specifically, I have been crunching a bewildering array of mortgage and budget calculations in an attempt to reach a harmonious compromise between my desire to be done with the instability inherent in renting and the desire to continue my indulgent lifestyle that relies on a high volume of discretionary income. I have reviewed copious amounts of data for the local housing market, the price/income ratios, the price/rent ratio, general economic indicators, interest rates, and potential for income increase over the next five years, and my likely use of such residence along a broad variety of criteria. It is certainly the most highly leveraged investment I will ever make, and so due diligence is absolutely imperative. That said, it’s easy to get lost in a mountain of figures and projections.
The bottom line (apropos in an accounting discussion) is that the decision to buy is laden with risk, regardless of much forethought is given. That said, the deliberative, methodical approach at least allows one to examine a multitude of scenarios and manage risks accordingly. And there’s the rub, I can manage downside risks, and buffer accordingly, but if the housing market tanks, everybody is going to take a bath, regardless of how well and responsibly they planned. The lesson of the US housing market was not lost on me — a raging mob of greedy and short-sighted investors, buyers, and brokers managed to destabilize and crater an entire market.
Maybe I should just be homeless.