Buyer's Market Timing
Let’s talk timing.
A buyer’s market like the one we are in now is perfect for two kinds of buyers: renters and buyers who are buying up.
Renters for obvious reasons: mortgage rates are low, and so are house prices. If you’re renting it doesn’t get much better than this.
That makes sense, but why is a buyer’s market perfect for people who are buying up?
The NAR (National Association of Realtors) keeps very good records of this kind of thing, and they say the average homeowner who buys a new home buys a new one worth about 50% more than their old home’s value. If you’re one of those people who are looking to buy up to a bigger or fancier home, you might be thinking “Right. They say home values have declined 10% (to use a round number), and I’m supposed to be happy about that? How can I buy a new house when I’m getting 10% less for my house than I thought I was going to get?”
Sounds good, but there’s one thing you have to remember: while your house was losing value, everyone else’s house was losing value too.
Here’s how it works: Let’s say a year ago your house was worth $200,000. Let’s also say that for the last year you’ve had your eye on that nice $300,000 number on the other side of town. Now, with values down 10%, your house is only worth $180,000. You basically lost $20,000. But the good news is that the house you’ve been drooling over for a year has also lost 10% of its value, or $30,000, and you can pick it up for just $270,000. When you add that into the equation, you end up making $10,000 on the transaction! (The $30,000 you made on the buy minus the $20,000 you lost on the sell.)
It’s like all the economic forces went into creating this buyer’s market just for you!
Nice, no?
Of course you’ll want to get the most dollar you can when you sell your $200,000 house, and with my marketing efforts you can, but just remember it’s better for your pocketbook to price your house right and get it sold quickly so you can get into that new, pricier home before the market changes.
Contact me and we can talk further: 507-317-0177 or jim@MankatoHomesOnline.com.