Should I move in this market?

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Fiat lux
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Should I move in this market?

Postby Fiat lux » Mon Mar 20, 2017 5:53 am

I bought my home in 2011 and it has increased in value ~$150k. The home is in a sought after area in my city and real estate in the area is hot.

Now, we have outgrown the house and are in what I see as a catch-22. Our home is up in value, but if we sell and move we will face buying a home in this market where all the prices are over-inflated. We want to stay in this same area.

My gut is to stay put for the time being and save more for a down payment. I dont want my mortgage payment to change too much when we move. Any ideas on what the right thing to do is here?

Novine
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Re: Should I move in this market?

Postby Novine » Mon Mar 20, 2017 6:38 am

Live in a house that meets the needs of your family and that you can afford. If you're unable/unwilling to move to an area with cheaper housing and you want a larger house, I don't see how you're going to avoid the cost of that by waiting. The local real estate market could tank at some point. But you could end up waiting a long time for that to happen. Who's to say that you'll be in a position to take advantage of that when it happens? I think people get too hung up on viewing their house as an investment when its primary purpose is a place for you and your family to live.

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jhfenton
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Re: Should I move in this market?

Postby jhfenton » Mon Mar 20, 2017 6:47 am

I would not expect that I could judge valuations and time the real estate market any better than I could the stock market.

andrew1976
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Re: Should I move in this market?

Postby andrew1976 » Mon Mar 20, 2017 6:52 am

I'd ask a realtor this question since he/she lives and breaths the real estate market in your area. Any good realtor should have a sense of realistic home appreciation over the short and long term. As you know, not all price points will have the same price appreciation. Go here to find a high octane agent for your area (top 5%):

https://www.daveramsey.com/elp/residential-real-estate

cherijoh
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Location: Charlotte NC

Re: Should I move in this market?

Postby cherijoh » Mon Mar 20, 2017 7:11 am

Fiat lux wrote:I bought my home in 2011 and it has increased in value ~$150k. The home is in a sought after area in my city and real estate in the area is hot.

Now, we have outgrown the house and are in what I see as a catch-22. Our home is up in value, but if we sell and move we will face buying a home in this market where all the prices are over-inflated. We want to stay in this same area.

My gut is to stay put for the time being and save more for a down payment. I dont want my mortgage payment to change too much when we move. Any ideas on what the right thing to do is here?


The real issue is that you want to stay in the same area and get a larger house for not much more money. Only two of the three are possible at any given time. If you wait to buy until the market isn't that frothy, then your current house will likely be harder to sell at a good price.

One thing you should consider is going on a "spending" diet. Pay attention to where your money is going and cut out the fat. See whether you can free up a little more cash flow to go towards a higher mortgage payment while simultaneously saving some extra money towards a down payment.

Alternatively, would it be possible to do a home remodel and add on more square footage? How much additional space do you really NEED? I tend to be skeptical when people say they have "outgrown" their house since it often boils down to "needing" a guest room AND an office (when they don't work from home) and .....

westie
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Re: Should I move in this market?

Postby westie » Mon Mar 20, 2017 8:14 am

If you consider the market where you live to be over-inflated your home value is too.

Danzangdc
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Re: Should I move in this market?

Postby Danzangdc » Mon Mar 20, 2017 9:30 am

andrew1976 wrote:I'd ask a realtor this question since he/she lives and breaths the real estate market in your area. Any good realtor should have a sense of realistic home appreciation over the short and long term. As you know, not all price points will have the same price appreciation. Go here to find a high octane agent for your area (top 5%):

https://www.daveramsey.com/elp/residential-real-estate


Sir, it appears you have drunk the kool-aid.

orca91
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Re: Should I move in this market?

Postby orca91 » Mon Mar 20, 2017 11:00 am

Fiat lux wrote:I bought my home in 2011 and it has increased in value ~$150k. The home is in a sought after area in my city and real estate in the area is hot.

Now, we have outgrown the house and are in what I see as a catch-22. Our home is up in value, but if we sell and move we will face buying a home in this market where all the prices are over-inflated. We want to stay in this same area.

My gut is to stay put for the time being and save more for a down payment. I dont want my mortgage payment to change too much when we move. Any ideas on what the right thing to do is here?


As others have said, there really is no catch-22. If you're going to stay in the same area, you are highly likely to be selling and buying in the same market. You can take advantage of the increase in your home now, and buy into what could be an inflated home price. Or, wait for a better time when things don't seem inflated, and then the increase in your home may be less or not seem so great. If you can manage a way to keep the value of your home going up and the very nearby market goes flat or even down, well... start your own business and keep doing that. :happy

Buy/move when you're ready. If you don't feel you have enough saved up now, don't make the move. Worry more about your own situation and standing on finances, not so much on the market. Or, worry about what you have control over in this deal.

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Midpack
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Location: Chicagoland

Re: Should I move in this market?

Postby Midpack » Mon Mar 20, 2017 11:05 am

Fiat lux wrote:I bought my home in 2011 and it has increased in value ~$150k. The home is in a sought after area in my city and real estate in the area is hot.

Now, we have outgrown the house and are in what I see as a catch-22. Our home is up in value, but if we sell and move we will face buying a home in this market where all the prices are over-inflated. We want to stay in this same area.

My gut is to stay put for the time being and save more for a down payment. I dont want my mortgage payment to change too much when we move. Any ideas on what the right thing to do is here?
Just reinforcing what others have already said.

Not only is trying to time real estate markets difficult, it's a zero sum game if there ever was one - especially if you're "staying in the same area." Sure you can wait until the price of your next home seems more reasonable, but the value of your current home will have become "more reasonable" too. The difference remains largely the same. It's one of the benefits of home ownership IMO, your next home will cost relatively the same after selling & buying. Unless you can sell high, and find a place to live for next to nothing while you wait for the market to "normalize" whatever/whenever that is, you're playing a losing hand IMHO.
You only live once...

missingdonut
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Location: Donutville, WI

Re: Should I move in this market?

Postby missingdonut » Mon Mar 20, 2017 11:07 am

andrew1976 wrote:I'd ask a realtor this question since he/she lives and breaths the real estate market in your area. Any good realtor should have a sense of realistic home appreciation over the short and long term. As you know, not all price points will have the same price appreciation.


How can you even begin to imagine that a realtor, who is compensated as a percentage of the value of homes sold, can provide true independent advice?

andrew1976
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Joined: Tue Dec 20, 2016 10:44 am

Re: Should I move in this market?

Postby andrew1976 » Mon Mar 20, 2017 12:43 pm

I hear you that realtors can be biased just as financial planners can be to. Yes, they can be hard to find but I do believe one could be found that will give sound advice. It's a place to start and is one source of data, and definitely I wouldn't hang your hat on one person's opinion. In my area, high volume realtors know that to get business, they have to price well and give good customer service. There is a ton of competition amongst realtors in my town but the top 5% of realtors definitely do much more than 5% of the total sales. I believe reputation and attitude still matters and even more so with local facebook groups promoting certain realtors over others.


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