Many people who are in the position of having to sell their current home in order to buy a bigger home or one with more amenities, are focusing on the fact that their current home will not sell for as much in the present market. What they don't realize is that the money that they will save on their new home when buying up will actually more than offset the loss on their current home.
The graphics shown below illustrate this point.
As you can see when you sell and buy up, you are saving more on the purchase of the new home than you have lost on the sale of your old home. In addition when the market does improve, and it will improve since the real estate market is cyclical, the larger home will experience greater appreciation. For example if home values were to rise 10% in future years the new larger home's value would appreciate by $38,000 as opposed to the $19,000 increase of the smaller home.
If you are in the position to sell and buy up, the current market offers an opportunity that will not be available when the maket begins to shift back to a seller's market.
The above graphics and figures are courtesy of Shift and Gary Keller.
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