Trading Up in Today’s Seeley Lake Buyers’ Market

Are you overwhelmed with what could be described as media-driven real estate malaise?  Everywhere we turn, we’re hearing about the recession and how today’s market is a buyer’s market, if you’re in a position to buy.  There is no doubt that real estate is a cyclical business - all of this has happened before, and it will likely happen again.  What goes up must come down, but what’s more important is, what goes down has always come back up. This is the case in Seeley Lake real estate, and I encourage you to reframe your thinking about the recession - consider that today’s market is ripe for you to trade up with your home and capitalize on the economic times.

Home values will most certainly continue their long-standing trend of appreciation over time, and equity buildup through paying down the mortgage remains a proven path to financial wealth. The key to making the most out of challenging economic times is having realistic expectations. You simply cannot sell high and buy low at the very same time. However, if you sell and then buy in this buyers' market, you will get less from your sale but be able to make it up with greater savings when you buy.  Overall, homeownership is best viewed as a long-term investment.

The Hazard of Trying to Time the Market

If you’re a potential buyer who is thinking about waiting until prices come down more, you are also gambling that interest rates will hold steady or drop.  What many people fail to consider is the impact interest rates can have on the real monthly costs of homeownership. Even a 10% drop in home prices is immediately nullified by an interest rate increase of a mere 1% on a 30-year mortgage loan.

"Obviously, if you're selling for less than you could have gotten three years ago, you're disappointed, but you really need to look at your bottom line," said Walt Molony of the National Association of Realtors. "If you're trying to trade up, whatever you're going to trade up to is going to sell at a discount, too. You need to look at your net."

For example, a $250,000 median-priced home in Seeley Lake (where prices have declined 25% in the last few years) has lost $62,500.  But consider that if you're moving up and buying a $600,000 house, which saw a $150,000 loss, in effect, you're making $87,500. 

Many smart buyers see the opportunity of a down market is the chance to trade up.  They understand that saving on the larger home purchase offsets any loss on the sale of their current home.  Today’s decreasing home prices are a tremendous opportunity for move-up buyers, and the prices won’t fall forever.

Are you considering trading up to a nicer Seeley Lake home?  Maybe you’re interested in making a smart move in a down market to buy a discounted vacation or second home.  If so, give me, Kim Koppen, a call and find out how I can help you with all of your Seeley Lake real estate needs!