Many Active Adults are addressing the same question.
I’d like to move on with my retirement plans. Is now the best time to buy or sell a home?
We all know the real estate market has had some difficult times over the last few years. However, let’s take a look at some of the obvious circumstances and see if we can find some clarity in the current situation.
Most people seem to agree that the real estate market has hit a bottom and it’s unlikely that home values will drop much more. Much of this is predicated on unemployment and while job growth does not appear to be increasing it doesn’t seem to be decreasing either.
So the conventional wisdom is that we are sitting at a bottom both in terms of employment and home values.
Let’s face it, we would all like to sell our homes at the market values of a few years ago. While it’s euphoric to think that the market will return to those levels, the reality is that we need to accept that what took place a few years ago was largely a case of hyper inflated values commonly seen in a bubble market.
So it’s more reasonable to expect that we are not likely to see the fast pace growth of the real estate boom years anytime soon.
The easy financing which offered real estate loans to just about anyone in any situation is gone. To get a loan today requires real credit and a real down payment with verification of income and employment. We’ve gone back to what was a typical process of financing a home 30 years ago.
Considering all of this, Active Adult Consumers need to consider a few obvious facts or trends we are seeing in the real estate market.
First, if your home is paid in full you may be saying, "Why do I want to sell now? I would rather wait until the market recovers to where it was a few years ago".
While waiting sounds like an obvious choice, you need to ask the following questions.
Do I want to continue to wait and put my retirement plans on hold?
Secondly, if I wait until the market recovers to sell my home, what will happen to the prices of the home I want to purchase?
Obviously when the market recovers, prices on existing new and resale homes will also increase.
So why wait to sell if you are planning on purchasing a new home?
Just as it might seem foolish to sell your investment in stocks when the market is at a low point, you need to remember you are also purchasing when the market is down. So yes you are selling low, but you are also buying low. It’s a simple exchange of equity. The key is to avoid selling low and buying high which won’t happen if you are buying and selling at the same time.
If you are using a mortgage for any portion of your new home purchase then this is an exceptionally good time to buy. We are at historically low interest rates that may never be seen again!!
Waiting for home values to return would be foolish as the benefit of a long term interest rate far outweighs the short term loss in selling at today’s lower house values.
While waiting appears to have its benefits in terms of your existing home's value, the downside is that you lose precious time while you are still healthy enough to enjoy your retirement. Additionally, home purchase prices and interest will surely be going up when the real estate market recovers.