Waiting For Home Prices to Rise Before Selling? Read This!

Everybody is discouraged by the drop in home prices over the last 3-4 years, especially people who want to "move-up" to a larger home.

Our statistics show that the median selling prices of residential homes in our 24 town area (from Branford to Waterford Connecticut) have dropped 14.1% since 2006 (as of November 2009). 

So should you "move-up" now or wait for prices to re-bound to 2006 prices (the same percentage as the decline of 14.1%)? 

I've estimated the results of buying now or waiting as shown in the table below: 

We're making several assumptions including:

1.  Current home and move-up home base prices in 2006 ($300,000 and $400,000)

2.  That the tax credit will only last until April of 2010 (not renewed).

3.  Prices will increase 14.1% in late 2010 or 2011 (at the same percent decline since 2006) 

Why is the gain so much larger by moving-up now?  Any increase in home prices will be a larger dollar amount using the median price percent change AND we're assuming the government tax credit will be phased out at the end of April 2010. 

So now is really a good time to "move-up" to that home you've always wanted! 

In addition, you "save" a net $14,100 by purchasing a more expensive home compared to what it would have cost in 2006 PLUS the government tax credit for a total of $20,600.