If you are selling one house and buying another, does the decline in the housing market really matter? True,

Asked by Vilan, Southern Arizona Mon Oct 20, 2008

the house you sell will sell for less but the one you're going to buy will also be less. Doesn't the falling tide lower all lboats? Or is that over simplistic?

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Spirit Messi…, Agent, Tucson, AZ
Sun Jan 13, 2013
Depends on the markets, are we assuming within the same city? A lot of buyers/sellers will lament about how much their property was worth in like 2005 or 2006. However, had they sold, they would have bought another house, possibly more expensive and be even more upside down. Those that sold and left the state or had the foresight to sell and rent, did "well".

If you want to move or have a need, I recommend you speak with local Realtor(s) in each location to get a feel for what you could sell your current house and what to expect in your price range as a buyer.

Best of luck.

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Matthew Jesc…, Agent, Tucson, AZ
Sat Nov 24, 2012
It's really a matter timing and how much leverage / equity to grow in the market swing...

So you want to sell in a good market. And buy in a bad market. That's the opposite thinking of the crowd.

It's also a matter of equity. If you own your home outright then you are actually gaining net worth when you trade up properly.

If you do not own your home outright then you are gaining nothing. In fact your just loosing because of selling fees.

Hopefully that makes since. If your timing is right you might break even or make money. If it's wrong you'll loose your shirt.

You really have to an an investor mindset to grasp it fully.

Oh I see I answered this question already lol I love these sorts of questions. I used to do a lot of day trading. Houses are the exact same concept just a different investment vehicle and a much more complicated transactions.
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Michelle Met…, Agent, Green Valley, AZ
Fri Nov 9, 2012
Hi Vivan,
I hope you are not in a position as some people are as far as being upside down in your house where you owe more then its worth. If that is the case, unfortunately you will have a loss when you sell. When you purchase a home at this point in time, the market is not increasing the value of homes high enough for you to have equity to make up for the difference. The market is ticking upwards at a gradual pace. It depends on how much equity you have on the home you are selling.
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Matthew Jesc…, Agent, Tucson, AZ
Tue Oct 30, 2012
It all depends on how much equity you have in your property. But my short answer is no most likely your not going to make any money or even break even.

Here's why,

There's a good deal of overhead in a transaction. When you sell figure AT LEAST 6% for selling commissions. But then you have to move your stuff too. The buyer may negotiate an even lower price as well.

However, take this example,

If you play the markets you can find imbalances. Say houses in a particular area are depressed for not particular reason other than the market is down.

You can exploit this in your swap. If your house happens to be up, then sell it and move to the house where the market is depressed.

(There's countless other investment strategies... This is just one example.)

Many people cannot stomach this though as it does involve risk. So my short answer is NO you will loose money in your move unless you love property investing and are highly skilled in it.
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, ,
Wed Oct 21, 2009

There are opportunities in every market and I think your thought process is correct. It may be "simplistic", but the reality is that it may be a great time for you to move up and take advantage of current conditions. You have good advice below including Brad's suggestion to "Find an agent that is on top of the market and cares about your needs... "
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James Dudley, Agent, Suwanee, GA
Mon Oct 20, 2008
Not all markets are declining.

For instance here in Atlanta some areas are feeling the effects more than others. Suburbs of Atlanta such as Alpharetta, Suwanee, Brookhaven, & Sandy Springs have not seen a huge decline in home prices, but longer days on market.

Your comparison to a falling tide is excellent. Keep in mind that when the tide falls sometimes it will expose islands and these are the areas I'm describing. In a normal market they don't stand out too much.
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Steve Belt, , Scottsdale, AZ
Mon Oct 20, 2008

That's an excellent way of looking at the market, and it works to a point, particularly for the move up buyer. Let's say you live in a $300K house, and are planning to buy a $500K house, which is an additional $200K. Then things change and you decide to wait. When you relook at the market, your $300K house has fallen 10%, but so has that $500K house. So, you sell your house for $270K and buy the new house for $450K, a difference now of only $280K. In essence, you've saved $20K.

The trouble for most sellers, is that the $30K they lost was 100% lost from the equity of the home, which means they have $30K less to put down on the new house. For many home shoppers, that $30K could mean the difference between having enough of a down payment to get move-up home they wanted.

And then, if you apply a larger decline than 10% (which sadly, much of Arizona has seen), many home shoppers have little, if any equity left they can move from their current home to a newer, larger home. Home owners of 10+ years or longer (that didn't refinance their home and take cash out) can probably still move up, but home owners of 5 years or less are likely in a break-even, or even underwater position.
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Brad Bergami…, Agent, Prescott, AZ
Mon Oct 20, 2008
If the property you are selling is less in value than that you are buying you are going to be making a great move. Now, if it is the other way around.. you will be loosing more %%% than gaining. Either way, it doesn't matter if need to sell or want to sell, you will be purchasing at the best time ever in real estate. So sell you home at low price and buy at a low price. Negotiate well and make your $$$ on the buy.
Find an agent that is on top of the market and cares about your needs and you will be fine.
Good luck in Sahuarita,
Web Reference:  http://bradbergamini.com
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Michael Krot…, Agent,
Mon Oct 20, 2008
Hi Vilan,

For the most part, you're right. A decline in the housing market affects most properties across the board so it will all be relative. Certain markets, however, have retained their value fairly well. The Tucson luxury market has sustained itself relatively unscathed through the past few years. Areas that are highly coveted and already built out have also seen values maintained or decline only slightly.

But for most consumers a slow housing market affects them just the way you thought of it: You may sell your house low but your purchase will also be reduced that much.

Many homeowners are realizing this and are taking advantage of the situation by making the move to another house (newer/bigger/larger lot/etc.).
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Scott Godzyk, Agent, Manchester, NH
Mon Oct 20, 2008
In simple terms you would think if you are buying low you are selling low. Depending on teh property, the area and its condition, some houses sell higher and when buying you can find a great deal and buy lower than the average you are making out on both ends. When looking at teh market as a whole yes that average would be considered correct, but indibidually it is always buy low and sell high.
Web Reference:  http://www.ScottSellsNH.com
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