Moving Up In A Down Market Makes Sense

BUYING UP IN A DOWN MARKET

Many current homeowners have recently seen their housing needs change. Perhaps they have a child getting ready to start school in the fall, or maybe they simply need more space. Whatever the reason, if your goal is to move into a more expensive home, don’t let the market scare you from moving forward.

With real estate on a slight downward trend, buyers can take advantage of very attractive home prices. However, for a lot of move-up buyers, the thought of selling their current home during a declining market makes them uneasy.  Here is some information that will hopefully make sense.

The figures below perfectly illustrate what a move-up buyer here in the Eastern suburbs of Cleveland may be facing.

Buying Up in a down market

 

In this example, the owners of Home “A” have experienced a 10% decline in the value of their home. On face value, this seems like a negative. Had the owners of Home “A” sold at the peak of the market, like in 2003 or 2004, they would have also purchased Home “B” at the peak of the market. The difference would have been $200,000.

When the market declines, the price of all homes decline.  Thus, Home “B” experienced the same percentage decline as Home “A”, yet went down a greater dollar amount.  The difference is now only $180,000. Although the sellers feel a “loss” in the sale of their Home “A”, they actually realize a net gain of $20,000 in the overall transaction.

So you see, a declining market can be an ideal time to make a move to a higher priced home.

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About The Authors

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services.

They can be reached at 216-346-3235 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

Moving Up In A Down Market Makes Sense is the property of The Schuman Team and may not be duplicated or used without their written consent. ©November,2011

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