I’ve written a lot recently about all the benefits this market offers first time home buyers. Reduced home prices, low interest rates, and tax credits make it a great time to be a first time buyer. While this is true first time home buyers are not the only ones who can benefit from low interest rates and reduced home prices.
It is also a very good time to be a move up buyer. If you are looking to sell a smaller home and move up to a larger one you may have to sell at a lower price than you would like, but you will more than make up for it when you buy at a reduced price.
If you sell your current home for 20k less that you may have at the height of the market, you may be able to by a larger home for 40k less than it would have sold for. The discount you receive on your purchase more than makes up for whatever your “loss” is on your sale.
On paper the math is clear. The problem is that sellers are emotionally attached to their home. It is often difficult for sellers to reconcile what they think their home is worth, or what it may have been worth at one point for what someone is actually willing to pay for it now. If they start looking at the market through buyer’s eyes they begin to see what it has to offer them.
Buyers who are currently on the fence or waiting to see if prices will go lower still may want to consider taking action now. Waiting for sale prices to get lower could backfire if interest rates go up in the meantime. A one-point increase in interest rates raises monthly mortgage payments the same as a 10 percent increase in prices.
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