3 Reasons for Moving Up in a Down Market

We have all seen the news and heard all the bleak reports, but the local market is not as bad as what is projected. See my article “The Sky is Not Falling in Rockwall, Texas.” The fact is, if you have considered moving up, there may not be a better time.

Here are three things to consider:

Percent of Net Loss/Gain
Let’s say for argument’s sake, that if you were to sell your home in today’s market, you would take a 5% loss over what you desire to receive. We are all playing on a level playing field, so we would also have to consider that the seller of your move-up home would also take a 5% loss. Base on your existing home value of $150,000 less 5% we are looking at $7,500. On the surface, that is not a loss you would want to take, but if the prospective home’s value is $300,000, the net loss to the seller would be $15,000, yielding a $7,500 net gain to you. The converse is also true. If the market is up, you may gain $7,500 on the sale of your home, but lose $7,500 on the transition.

Good Selection
The primary reason we see sales prices of homes being less at this time is the old “supply vs. demand.” What this means to the buyer is that there is plenty of inventory in all price ranges to choose from. Through my experience, there is really no such thing as the perfect home, but you can get a lot closer to what you desire than you would be able to in a “Seller’s Market.” In times past, you may have been reluctant to sell before you had located you next home. In today’s market that simply is not necessary with the larger inventory.

Interest Rates
The interest rates continue to hold in a very favorable area for the borrower. They have not risen significantly, and though they probably will not go down much, when the market gets stronger, we could see a rise which would also cost you money every month. Again, the news reports how bad the mortgage industry is, and yes they do have issues, but they are still lending money to those who have good credit. What got them into trouble was lending money that should have never been lent. By the way, FHA loan limits have been raised to over $270,000 and dropped a lot of the restrictions that previously made them a little less desirable.

Timing is everything, and if you are considering making a move, this truly is a great time to do it.