Why On Earth Should I Move Now?
Let's face the facts, there aren't many buyers out there. And to make matters worse, nowadays, if it's not on sale, people won't buy it! Whether it's a necktie, or a car, or a house, if it's not on sale, the fish just aren't biting!
I'm no different than you are, when I sell my property, I want the best price I can get for it. Since the market is down right now, the best bet is to wait until things pick up again. Or... IS IT?
I wish I had a nickel for every time I've heard someone say
"We're going to wait until the market improves"
Since there are hundreds of sellers with the same idea, think for a second what will happen when they all jump into the market at the same time. But that's another story.
Believe it or not, the smart money is moving RIGHT NOW! If you want to know why, you can read on, or you can throw this letter away and forget the whole idea. It might cost you if you do, but no big deal, it's just tens of thousands of dollars.
A good look at the "good old days"
Remember when we had a seller's market? Sure, you could sell your house quickly and at a good price. But then you had to find one to buy. There weren't many properties on the market then, so most likely you couldn't find the one you really wanted. But you had to live somewhere, so you settled for the house on the busy street instead of the cul-de-sac you wanted. Or the one that needed repairs instead of the newer home that you wanted.
By the time you decided to make an offer, you found out that someone else had already bought it! In fact, there were THREE other offers, and the winning one was for more than the asking price! Remember? So it was back to the streets to find another one. Then when you finally did buy one, you hoped like heck that the interest rates wouldn't go up while you were in escrow, costing you more every month or maybe causing you not to qualify for the loan at all!
That was the "better market" that people are hoping will return again!
Can we talk?
Prices are down 10% in the past year, and interest rates are the lowest in 20 years! The experts are saying that buying up in a down market is the best thing you can do. Let's look at some numbers to prove it.
Assume that you wanted to move back in '89. The market was great then, wasn't it? Your house was worth $160,000 then, but now it's only worth $144,000. But the house you wanted to buy was priced at $220,000 then, and now you can get it for $198,000. So both houses went down 10%, but look, the house you want to buy went down $6,000 more than yours did. That's the "hidden equity" gain that experts talk about when you buy up in a down market.
Now think about this, when the prices go up again, it works in reverse. If you don't buy until then, the bigger house you want will have gone up $6,000 more than your present house did. So, either you take $6,000 out of your savings account to increase the down payment, or else you can get a larger loan to the tune of $50 more per month.
Here's a side by side analysis, assuming for the sake of argument that you owe $100,000 on the house:
(Seller's market) Rate @ 10.5%
|1996 (Buyer's market) Rate @ 7.5%|
|Sales price of old place:
|Price of new place:
|Total Monthly Payment:
So when's it better to make your move, in a seller's market, or in a buyer's market? You tell me!
The same house will cost you $411 LESS per month today than it did in the "good old days" when you could have sold your house for more. I don't have to tell you what that adds up to in 30 years, do I? What the heck, I'll tell you anyway, it's
Part of the savings is because the interest rates were a lot higher back when the economy was soaring! The fact is, if the market improves, then the interest rates will rise also. The Federal Reserve makes sure that you can't have it both ways!
Did I make my point? Am I communicating? There is so much misunderstanding about the market that we are in today, and I don't want you to lose in the long run. Don't focus on the fact that your house isn't worth was it was 4 years ago. Instead, look at the big picture and consider whether waiting until the market improves is really in your best interests. It's something to think about, isn't it?