Why Would You Want To Sell When The Sky Is Falling?

November 20, 2008

Are you crazy? Are you so flush with money that you don’t mind giving away $20,000 or $30,000 of your equity? I almost said “hard-earned” equity – but for most of us who’ve bought in the last 10 years, we didn’t have to do much other than sit back and watch our home appreciate. But however we’ve earned the equity, it doesn’t seem on the surface to be a good idea to sell right now.

But what if I told you that by giving away $20,000 I’ll give you back $30,000? You’ve now netted $10,000. Sounds a bit better now, doesn’t it? You’re continuing to earn equity the “easy” way – even in this different market.

Let’s say that you own a house that a few years ago was valued at $200,000 – up 30% from when you bought in 1999. Unfortunately prices have dropped in your area so now your home is only worth $180,000 – down $20,000 from 3 years ago. Ouch! It’s no good wishing you’d sold then – that window of opportunity has already passed. But if you have a stable job in an industry that appears to be weathering the economic downturn fairly well, then you might want to consider taking advantage of lower prices on larger homes. If you’ve had to drop your price 10%, then larger, more expensive homes will have to drop their price also. A home that would have cost $300,000 two years ago may now be listed for $270,000.

Then add in the monthly savings of an incredibly low interest rate (I just spoke to a Mortgage rep and he told me as of December 30, 30 year mortgage rates are holding at between the high 4% and mid 5% range. Fifteen year rates are slightly lower at 4.75%.) So what does this mean to your bottom line? For many, the cost is only a couple of hundred dollars more a month for a much bigger comfortable home. Only you can do your calculate what the cost of moving into a more spacious home would be. If I were looking to move up, and my long-term employment seemed secure, I’d definitely be looking now!

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Local Information for Minneapolis, MN

Latitude: 44.964465 -- Longitude: -93.268198

Other Area Cities: Minneapolis Richfield Fridley Robbinsdale Saint Anthony Brooklyn Center Arden Hills Brooklyn Park Coon Rapids Edina Golden Valley Blaine Maplewood Plymouth Saint Paul Wayzata New Brighton Saint Louis Park Spring Lake Park New Hope

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Minneapolis (pronounced [?m?ni'æp?l?s]) is the largest city in Minnesota, United States, and the county seat of Hennepin County. It adjoins Saint Paul, the state's capital and second-largest city. Together they form the core of the Twin Cities metropolitan area, the 16th-largest agglomeration in the country (and roughly 65th-largest in the world), with about 3,500,000 residents. In the 2000 census, the city itself had a total population of 382,618, making it the 47th-largest city in the United States. However, in the Census' 2004 estimates, that number had decreased to 373,943, putting it in 49th place, between Honolulu and Colorado Springs. If the two core cities themselves were combined together in the census, the resulting "city" would rank 18th, just between Memphis, Tennessee and Baltimore, Maryland. -- Source: Wikipedia.com

Minnesota 2000 Census Population Profile Map

	Minneapolis	Minnesota	United States
Population	382,618	4,919,479	281,421,906
Median age	31.2	35.4	35.3
Median age for Male	30.8	34.4	34
Median age for Female	31.7	36.3	36.5
Households	162,352	1,895,127	105,480,101
Household population	364,554	4,783,596	273,643,273
Average household size	2.25	2.52	2.59
Families	73,939	1,255,141	71,787,347
Average family size	3.15	3.09	3.14
Housing units	168,606	2,065,946	115,904,641
Occupied units	162,352	1,895,127	105,480,101
Vacant units	6,254	170,819	10,424,540

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