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

Real Estate Agent with Page Taft Real Living

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: 


Current Home

Move-UP Home

2006 Price

$         300,000

$             400,000

2009 Price (-14.1%)

$         257,700

$             343,600

Purchaser Savings

$           42,300

$               56,400

Net Gain for Buyer


$               14,100

Tax Credit


$                6,500

Total Net Gain


$               20,600








Current Home


2006 Price

$         300,000

$             400,000

2009 Price (-14.1%)

$         257,700

$             343,600

Future Price (14.1% Gain)

$         294,036

$             392,048

Move Up Buyer Gains

$           36,336


Move up Buyer Pays


$               48,448

Net Cost for Move up Buyer


$               12,112

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.

Comments (1)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Ed, great job on this blog and the comparison that you made.  Hopefully Buyers will read this and take your advice.

Dec 27, 2009 12:23 PM