Using Your Equity To Move Up - Now Is The Time!

By
Real Estate Agent with Joe Manausa Real Estate 8508880888

Is this a move-up market?

Yesterday we had someone wanting to buy a home in Tallahassee come in to the office for a consultation. She was concerned that with everything she has read in the paper and online about the "soft real estate market", that maybe it was not the right time for her to move from her townhouse into a single family home. She could not have been more wrong.

She purchased a townhouse in Tallahassee in 2001. She has not refinanced it. We were able to show her something that amazed her!

First of all, as most young people do, she put no money down when she purchased her townhouse in 2001 for $82,500. Today, that same property will sell for $145,000 to $150,000. That means with no money down, she now has $60,000 worth of equity (that includes her paying closing costs when she sells!).

So, with the equity from the sale, she can comfortably purchase the $225,000 home that she really wants. She was amazed to find out she had so much equity in her home. With interest rates being so low, she will be able to keep the payment in a comfortable range for her.

She was not aware of how much appreciation that we have seen in the Tallahassee Real Estate Market. I figured I might as well share the same information with the readers here.

Year

Average Single Family

Average Condo/ Townhouse

Mobile/ Manufactured Homes

Residential Lots

2006

-0.2%

-3.0%

-4.2%

-23.1%

2005

10.7%

10.0%

-11.2%

11.1%

2004

27.9%

36.9%

16.8%

40.9%

2003

41.0%

64.6%

21.2%

49.3%

2002

58.2%

86.1%

46.3%

105.9%

2001

67.2%

81.0%

57.2%

71.5%

This table shows us that prices now are less than 1 percent down on Single Family homes versus 2006. But versus 2005, that same category is up nearly 11%. If you bought a home in Tallahassee in 2001, most likely it is worth 67% more today than it was when you bought it!

Townhomes (and Condos) are down 3% this year versus last year, but up 10% versus 2006. Using the same scenario as above, this is why our buyer has so much equity in her townhouse.

This is an excellent move-up opportunity for someone who has been in a Tallahassee home for 5 years and would like to move-up. There is plenty of inventory and the Tallahassee Home Owner has built-up a nice bit of equity towards the purchase of a new home.


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Joe Manausa, MBA, CRB, CRS | Broker / Owner | Century 21 First Realty

2365 Centerville Road | Tallahassee, Florida 32308 | 850-386-2001 | http://www.manausa.com/

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Tags:
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Rainer
31,453
Carolyn A. Rzaca
ROYAL SHELL REAL ESTATE, INC. - Naples, FL
Broker Associate, GRI,SRS,TRC

Interesting information, thanks for the update.  Good luck with your Buyer!

Oct 30, 2007 06:28 AM #1
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate
Thanks Carolyn.
Oct 30, 2007 06:33 AM #2
Anonymous
Wes

That's great point, most people who own home still got plenty equity.  In real estate, one stone kills two birds. In other word, if Person A buys a home, saying a low end home, the seller gets the proceed from the sale to buy another home, presumably a more expensive home .  So that Person A is really responsible for two sales.

But now, the low end homes are not selling. The culprits: Subprime, tighting lending standard, media. etc; Therefore I expect the high end home inventory will inevitablly piling up.

The only way to move inventory is to cut prices, by how much?  enough to bring the market back to equlibrium.

Oct 31, 2007 06:43 AM #3
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Wes. I think you've been reading too much national media hype about the subprime market. The low end homes are still selling fine. They are selling better than any previous year (except '05 and '06 boom). We are a growing community and there are buyers for these homes. The "pile-up" of inventory has already occured and we are starting to see the flattening of these inventories.

Will high end prices come down? I suspect so. How much, I don't know (my crystal ball broke). I know the cost of development is being pushed through the roof by new state and local building rules, so I don't think we will see a long-term depreciation period.

Oct 31, 2007 07:19 AM #4
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Rainmaker
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Joe Manausa

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