3 Great Reasons To Sell In A Soft Market
Uncategorized
February 21st, 2010
Letting go of your home or investment property at what seems to be a rediculously low price is hard to swallow, even for the most far-sighted among us. But selling in a soft market can actually be a financially rewarding prospect, provided you are looking to re-invest into a higher price bracket than the property you are selling. Consider the following:
Great Reason No. 1. Do The Math
Let’s assume our market is off 20% from stabilized value, or value assuming an equal number of active buyers and sellers at a given time. A house selling for $200,000 today would otherwise have sold for $250,000, resulting in a $50,000 ‘hit’ to the seller. But the sellers loss becomes his gain when he re-enters the market as a buyer purchasing a $350,000 home, which is $87,500 off its stabilized value, or value assuming balanced market conditions. In this example, the seller nets $37,500, an 18.75% gain on the selling price of the home.
Great Reason No. 2. All Sub-markets Weren’t Created Equal
Reflecting typical mid to post-recessionary trends, home prices are beginning to stabilize in the lower-tiered sub-market, as evidenced by the comparatively large number of homes selling below $150,000. Higher priced sub-markets are nearly always the last to recover from an economic downturn, and this cycle appears to be following suit. Therefore, the hypothetical example outlined above might better be demonstrated by applying a 20% hit to the lower priced home and a 30% hit to the higher priced home. This example results in a net savings to the seller of $100,000, or a 50% gain on the selling price of the home. Starting to feel better?
Great Reason No. 3. Choices, Choices, Choices……..
Buyer-favorable markets, for any commodity, including real estate, are all characterized by one unavoidable fact – greater choices for the buyer. If your next purchase may be your last, you may never see another market with so many choices from which to select. Price aside, ‘moving up’ should put you in the house you have wanted for many years, if not the home of your dreams. Selling today puts these odds in your favor.
If this logic appeals to you, give me a call at (530) 224-6716 and we can discuss how you can take full advantage of current market conditions to find your dream home.
