Why You Should Move UP!

Why Should YOU "Move-Up" Now to a Nicer Home, Given Today's Market Conditions?

Due to the huge appreciation homeowners have gained in the last 7 years (some lost in the last 2), the uncertainty in making a "move up" can be perplexing. The idea of purchasing a home for the benefits of comfortable living, proximity to services and schools, neighborhood preferences, etc., have all been muddled and now redefined by the boomers and the "echo" boomers. For some, homes have become investments for lost years of retirement funding. This phenomenon has created a speculative and uncertain condition that can fog the reality of why we have homes in the first place: to enjoy the benefits of home ownership!!!!

Let us discuss some of the opportunities of moving up TODAY, in a down shifting market:

•1.     Given interest rates are still at 50 year historic lows, the lending environment is still in our favor.

•2.     The availability of low cost money aside, perhaps the most significant advantage to moving up in a down market is the large selection of homes available. (This can also work against you as the selling homeowner.)

When a market has a glut of homes, as is the present condition, one of the first adjustments the real estate market experiences is for homes to return to values based upon the "foundational" criteria of the home value: location, quality of the home and neighborhood integrity. These are the primary aspects that buyers begin to distinguish a value between one home and another.  Buyers become more selective because they seek specific characteristics that specifically satisfy their family's needs and add extra value to the quality of their lives. Homes must scream out "added value" to sell.  This concept may be the most compelling of all reasons to "move up"...to get a better horse for the long term race.  

The vast majority of homes will struggle to sell and the large inventory can cloud the vision of choice.  Many "good" properties are on the market, but selecting the right property with added value becomes more complex and can be confusing. (A good agent will exploit these advantages in the market place.  After all, the real key to successful real estate investment is in the PURCHASE.  Every great investor knows "it's on the buy side where the money is made!!"

•3.     A third major consideration in taking advantage of the move up market is the big jump in the growth of your current home's equity. Even the less expensive properties have improved disproportionally to historical trends. This chance to leverage "up" NOW gives more opportunity to purchase a superior property with inflated dollars. (Note: Since 1850, California property has appreciated 2% over inflation (2.5-3.5%). California appreciated nearly 100% from 2000-2005.  These dollars are more valuable now because capital is extremely difficult to acquire, and this appreciation cycle may not be experienced again in the near future, if ever.)  Now is your chance to leverage the "rapid" equity growth you've achieved.

•4.     The fourth advantage of the move-up opportunity is that "upgraded" properties have more qualities that bring greater enjoyment in the present, and greater financial protection overall in a down market. Regardless of any one person's opinion, real estate has become an "investment vehicle" for the boomer generation, as much as it is a dwelling to enjoy and live in. These two uses have merged and the phenomenon of living in YOUR most prized and valuable asset, can't be under estimated. With an entire nation participating, who can complain?

•5.     Lastly, we must look at the value of home improvements made on a "better" property compared to a lesser valued home. Capital dollars spent on improvements increase the value as well as enhance the personal enjoyment of a home.  A home in greater demand due to "foundational issues" will retain and appreciate in value much faster and for a longer period of time due to the "upgrades" put into it. Hence, money invested in a "better" home will yield a greater return for the homeowner.

Ultimately, regardless of the advantages of selection or improvements or even personal needs, fundamental economics must be the final conclusion when considering property changes. Speculation in a fast moving market can be financial suicide. BUT... Complete non-participation can be even more costly! It is essential that any home selling or buying strategy must include good planning and proper financing.

So in summary, the fundamental advantages of moving up in today's market NOW are:

•1.     Hugh selection let's you choose a BETTER home without overpaying

•2.     More upside appreciation with better properties over the long haul

•3.     Equity gained from current home results in more buying power

•4.     More personal enjoyment, better amenities, services and schools

•5.     Protection from a severe down market, and

•6.     Better return on improvement dollars

For the past several years, we have been consulting with homesellers and buyers on proper move-up/down strategies, advising them with respect to protecting their financial investments, helping them to find and negotiate the "right" deal on the right home, and striving to protect their futures.  If we can help you, or someone you know, make the right decisions in today's market, please call us today at 707-576-1300.  Ask for Kelly!