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Let's say that I want to move to a better house. It's is now a buyers market so I have to take a low offer on my old house. But I get to pay a low price on the new, better house. Or let's say a couple of years ago it was a sellers market and I sold my old house at a huge profit. Wouldn't all the profit be eaten up when I buy the better house since it is also going to cost more?
Is this just over simplistic?
I understand there are other variables like first time homeowners. They definately want a buyers market. And folks who are moving for a job. They are working with a timeline and might have to buy a new house while the old one is on the market.
But for folks like me who want to get a better house in the same town; does buyer or seller market really mean anything?
But for folks like me who want to get a better house in the same town; does buyer or seller market really mean anything?
Since the markets are local and also dependent on price range (i.e. perhaps there's still a shortage of houses in the lower price ranges, but a glut of inventory in the mid-range) you might be able to sell your "starter home" for more money and purchase an upgrade home for not a heck of a lot. Conversely, if you are trying to downsize and find yourself with a lot of competition both with sellers and buyers, you might be in the reverse position.
Since home prices tend to trend inversely to interest rates (when interest rates are high, prices might be lower), you might buy a house at a lower price when interest rates are high. Your payment may be higher but if you're on solid finance ground, when interest rates drop (and house values trend upwards), you're in a better position to refinance.
Let's say that I want to move to a better house. It's is now a buyers market so I have to take a low offer on my old house. But I get to pay a low price on the new, better house. Or let's say a couple of years ago it was a sellers market and I sold my old house at a huge profit. Wouldn't all the profit be eaten up when I buy the better house since it is also going to cost more?
Is this just over simplistic?
I understand there are other variables like first time homeowners. They definately want a buyers market. And folks who are moving for a job. They are working with a timeline and might have to buy a new house while the old one is on the market.
But for folks like me who want to get a better house in the same town; does buyer or seller market really mean anything?
BINGO!!! The only time the market really matters is when you're looking to sell a property and not replace it, or when you're looking to relocate to a different area.
Of course, pricing correctly for the sale is still important as you don't want to sell for a ridiculously low price. On the other hand, if you can find yourself a "steal of a deal" when it comes time to buy, you might be ahead of the game when it's time to sell again down the road.
The best deal for someone in the situation you describe is when their area is in a seller's market for prices below a certain point break, and a buyer's market for prices above that point break. Which happens more often than you'd think, because real estate is not only local, and local to the point of neighborhoods, but you can have a buyer's market AND a seller's market in the same area as described above. That's a perfect time for those looking to move up to sell AND buy at the same time.
BINGO!!! The only time the market really matters is when you're looking to sell a property and not replace it, or when you're looking to relocate to a different area.
Sorry but this is not true. Math never lies. If you live in house A and its value is $200k and you want to buy house B and its value is $350k, then you must come up with that difference of $150,000.
Now, if the market gets bubblicious like it did over the past few years and values go up 100%, house A is now worth $400k and house B is now worth $700k. Now, to make the same move that was stated above, it would cost $300,000.
Therefore, falling house prices make it easier for those attempting to move up the property ladder!
Very interesting. Even though the percentage is the same thing, the raw dollar amount (which is most important) is very different.
So it looks like a buyers market is best for folks who want move out of that "starter home" - BTW the one used used the term "starter home" described what I was thinking.
Quote:
Originally Posted by mojo_1979
Sorry but this is not true. Math never lies. If you live in house A and its value is $200k and you want to buy house B and its value is $350k, then you must come up with that difference of $150,000.
Now, if the market gets bubblicious like it did over the past few years and values go up 100%, house A is now worth $400k and house B is now worth $700k. Now, to make the same move that was stated above, it would cost $300,000.
Therefore, falling house prices make it easier for those attempting to move up the property ladder!
If you are moving up, you can actually come out ahead.
If your house is valued at $150,000 but you have to sell it 10% lower, you are down by $15,000. If you are buying a house that is valued at $300,000 but they have to come down 10%, that is a $30,000 "savings" to you.
You were down $15,000 on your own home, but saved $30,000 on the new house, that means you are ahead by $15,000!
Wow, I never thought of it that way (in terms of actual $$, rather than %). That is so cool - it's exactly what I'm doing ("moving up" in value of property). So on top of the fact that I'm moving from a fairly stable market to one that's really down, the price difference gives an added benefit in terms of real $$$.
I think this market, at least here in Salem OR, is very advantageous to people that want to do just that. Our starters homes have for the most part held value since they are in the most affordable price range.
Homes over $300,000 here though are going nowhere with increasing inventories. For people that get promotions, etc, they can do well with this approach.
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