Real Estate Market: Should I Stay or Should I Go?

“It depends!” Should you buy, sell or sit tight? We get asked this question all the time, so we want to take this chance to explain why we give that answer.  First, it is important to know the residential real estate market has now outperformed the same period in 2010.  This is an important note since the market was supported by the federal tax credit during the first part of 2010, which had a significant impact on sales at that time.  Considering 2011 has not had this stimulus, we are very pleased that we are ahead of 2010 and we predict we will see an annual increase in activity of near 10% as compared with 2010.  Pretty impressive indeed. Now, should you buy?  If you have job security, a good credit score and income needed to support the next home, the opportunity to buy has never been better.  Low interest rates, plentiful inventory and low prices have created the trifecta for buying. Buyers moving up in price point are in the most advantageous position because they realize the highest benefit financially. Should you sell?  If your housing needs include a move-up to a higher price point, now is the perfect time to sell – prices are lower.  Does this make sense?  Yes!  For example, if your current home is down 10% in value and has dropped from $200,000 to $180,000, you “lost” $20,000.  However, if you are moving up to a $350,000 house and it also dropped the same 10% in value, it was once worth $390,000.  That seller lost (or you have gained) $40,000.  If your housing needs indicate a move-down in price point, you may want to wait – assuming you are financially able to do so. Should you sit tight?  If your job security is questionable, if your credit is flawed or if your income is stretched, you may want to postpone a buying or selling decision.  If your equity has been minimized by any adjustments to values in your local neighborhood, you might want to sit tight.  As mentioned above, if you are down-sizing, you may also want to sit tight unless you really need to decrease your monthly expenses. See, every situation is different.  As your trusted advisor, it is our duty to talk to you about your specific needs.  Call us, e-mail us – We’d love the chance to talk to you or your friends about the many questions we face about this wonderful world of real estate!