Trade Up Now or Wait?

Why a Soft Market Might Be Ideal!

The general media has invested so much into perpetuating the idea of a "housing bubble" that it may be just the right time to turn that to your potential advantage.

Just a couple years ago just about any buyer had to brave the auction style feeding frenzy, submit their bid, cross their fingers and hope that their over asking price offer was enough to do it against the dozen or so other interested parties.

It is no doubt that home sellers were extremely happy. The problem was that since we all need a place to live, didn't almost every seller turn right around and immediately become buyers? Didn't most of those sellers that now were buyers end up trading up to a larger home? Wouldn't that mean that they were going to pay a premium on a higher valued home?

So in the first half of this decade you likely got a premium on your $140,000 house let's say a 5% premium or $7,000 then didn't you likely pay that same 5% premium on the $250,000 house or $12,500?

Well then if houses are selling for less today let's say your $160,000 house sells at a 5% discount or $8,000 wouldn't it then make sense that the $275,000 house you would like to buy today would have a similar 5% discount or $13,750? Now I don't know about you, but I would think now is a better time to be selling and buying unless you are down sizing. Wouldn't you agree?

I realize this is a simple example and will vary depending on the market, but doesn't the premise remain? I mean if you are looking to move up aren't the cheaper homes moving faster than the higher end homes?  Couldn't that add up to more discounts on the higher priced homes?

Just something to think about and share with anyone looking to sell or buy, especially when a seller has an offer that might be a little less than what they want to accept.