Hypothetical Situation- in response to NOVA housing decline (real estate market, apartment) - Northern Virginia - Virginia - City-Data Forum

arabellava · 07-14-2008, 09:27 PM

SOOO- if you had already owned a house more than 5 years, and still are ahead $$$ (even in a slump- house is also close to DC/great school district).. kids are still babies so no risk of upsetting any school move..

Would you sell NOW- before the major slump (minimize decrease).. rent somewhere (a possibility is to stay at parents house- though crampy and not great- flexible and central location) and then jump on a house that pressumably would be lower than if having to buy when selling at the same time.. Since we have really young kids- our new house should be the place we settle til they are out to college. Our current house- though we had extensive work done and is really great- top notch details and appliances- 1/2 acre level lot- is not accomodating to having teens or an elderly parent (so we need a really big lower level which we don't have).. we've evaluated remodeling again but it's not cost effective (for our situation).

I know moving is unpleasant- but we could afford to take our time to search for a house (hopefully when prices go down even more rather than go up or erratic) rather than panic to buy when/if house sells..

thoughts?

ShannonMilligan · 07-15-2008, 05:46 AM

So you want to sell in order to trade up is what I am getting...You will get all kinds of answers on this. Here is my opinion:
I think living with parents is a bad idea. You really never can go home again, lol! I tried this while our home was on the market and I lasted 2 weeks and I moved us out. (Family of 4 that is plus a dog)
No one can predict the market. Many like to try, but no one can give you the real answer. Many think the market will continue to decline, so if you plan on moving up within the next few years then it probably makes sense to cash out while you can...before the value slips further.
Others think the market will recover. But the question is when. I am in Ashburn and although a lot of homes have decreased in value, many seem to be moving...who knows.
So it really is up to you. If you rent after selling just think about if you can stand it for however long it takes for you to buy your new home. After moving out of my parents we rented an apartment for 6 months and I couldn't get out of there faster. You could rent a nice home though.
Anyway, good luck with whatever you do. Personally I think the market will level off within the next year or so and then stay level for a few years with no real appreciation. We plan on staying in our current home for at least 10 years so I don't care what the market does as long as we break even when we do sell many years down the road...We have never bought a house to make money. We have always bought our houses to have a home.

Margery · 07-15-2008, 06:05 AM

I'm sure you've heard this before, but real estate is cyclical. The late 80's-early 90's saw a boom and then a decline. When we bought our home in Loudoun County in 92, sellers were having to bring money to the closing table because they bought at the height of the market and were selling in a down market. The market took off again in 2003, interest rates were low and prices zoomed. Now interest rates are going up with a decline in prices, but houses are still selling. There will be a slight rebound in the next year or so, because you will have pent up demand. People want a home of their own. Twinmma summed it up very well. Don't buy a home to make money, buy a house to have a home.

Nancy in Nokomis · 07-15-2008, 06:22 AM

Arabellava - I am in the same situation as you - my house is too small. My situation is worse since my home has gone down at least 100k in value since I bought - so I am trapped for a long time.
Maybe you should sell before your value goes down even more - if you really think you can sell at the price you want in this market. With banks failing and prices going up on everything there must be even less people looking for homes -

claremarie · 07-15-2008, 06:34 AM

Don't sell a house that works for your family now (and will work for years). You have no idea what lies ahead, either in the real estate market or your family -- job changes, health changes, parent issues, etc. Hang onto your great location, and enjoy the fruits of your remodeling work.

MKing · 07-15-2008, 08:04 AM

Good luck arabellava since no one can predict what will happen in the housing market it seems to be a gamble either way. We can relate to not being sure what to do, since we are in the situation of having too big of a house for us now. We bought in 2001 and would be lucky to break even if we tried to sell. We are looking to move closer in towards the city to be closer to my husbands parents who just moved into a senior community. So there is really no easy answer.

I have heard about people house swapping, I am not sure all that is involved but I think you try to find someone in the state/city you want to move too, that wants to move to your state/city and you trade houses. Now I am unsure if you buy theirs and they buy yours or if you all just live in each other's homes.

Really I have just heard about this in the past few months and haven't researched it.

As for us we are just going to stay put as we have a great interest rate and my husband loves our house so much! LOL but it's funny how he doesn't like the 100 mile drive one way when we go to his parents.

Like I said no easy answer.

Best wishes and I hope this works out wonderfully for you and your family. Please keep us updated.

smaug20000 · 07-15-2008, 08:50 AM

It's definitely a hard decision to make, and another thing to consider is that it is hard to keep the house in good condition to be on the market for a long time while having 2 young kids. We decided to sell our 2 bedroom condo after having baby 2. Well, that was 6 weeks ago, and it is driving us crazy. This Sunday we'll be on about our 5th open house, and that' s driving us crazy too. So anyway, make sure you know it is a lot of work and a big commitment to be on the market. And then again, you can decide to sell, but you need the other 1/2. You have to have someone that decides to buy. We are probably going to take our condo off the market soon because even though it would be nice to have a bigger place with a yard, we are close to a nice preschool that my toddler is starting at in September. Good luck, this market sucks.

5stones · 07-15-2008, 08:53 AM

I agree with clairemarie...You house works well for you now and you have equity..you don't NEED to sell. pay your bills and sit tight, ride out this downturn...it will go up again (it always does)

You don't even have school aged kids, but you are looking at what will work for Teens..too far ahead too many unknowns. Jobs could change and you'll have to re-locate etc...
Moving kids in elementary school ...is easy. trust me we've moved our kids and youngest one has never had an issue. (moving my oldest 2x in middle school..not fun but she is doing great)

so...sit tight in 5 years you will probably make a good deal of money and find a bigger house (maybe right in your area) and be able to plop a BIG downpayment down!

mojo_1979 · 07-15-2008, 01:12 PM

Quote:

Originally Posted by arabellava

SOOO- if you had already owned a house more than 5 years, and still are ahead $$$ (even in a slump- house is also close to DC/great school district).. kids are still babies so no risk of upsetting any school move..

Would you sell NOW- before the major slump (minimize decrease).. rent somewhere (a possibility is to stay at parents house- though crampy and not great- flexible and central location) and then jump on a house that pressumably would be lower than if having to buy when selling at the same time.. Since we have really young kids- our new house should be the place we settle til they are out to college. Our current house- though we had extensive work done and is really great- top notch details and appliances- 1/2 acre level lot- is not accomodating to having teens or an elderly parent (so we need a really big lower level which we don't have).. we've evaluated remodeling again but it's not cost effective (for our situation).

I know moving is unpleasant- but we could afford to take our time to search for a house (hopefully when prices go down even more rather than go up or erratic) rather than panic to buy when/if house sells..

thoughts?

The housing slump has been upon us for approximately two years already. It is a little late to try and time the market. Since you bought "more than 5 years ago" that would mean you bought probably near the end of 2002. The bubble was underway at that point but it was still early. Worst case scenario is that in a couple of years your house will be worth about the same as you paid for it. This assumes that you haven't "liberated your equity" to "invest" in boats, hummers, vacations, or other junk over those 5+ years.

In summary, if you've been prudent with your finances, you will see lots of paper equity disappear, but you still should not wind up underwater on your loan.

Nancy in Nokomis · 07-15-2008, 01:15 PM

One other thing to consider which we are thinking about - How about adding on to the house? if you like your neighborhood and schools and you wont have to pay the hefty realtor fees and moving expenses.

I just reread your post - how come remodeling would not be cost effective? Just interested in case we decide to do it.