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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Staten Island (IPA: ?stæt.?n'a?l?nd) is one of the five boroughs of New York City. Situated on an island of the same name that is the most geographically separate of the city's boroughs, Staten Island is the least populated of the five boroughs. The Borough of Staten Island is coterminous with Richmond County, the southernmost county in the state of New York. Until 1975 the borough was officially named the Borough of Richmond. With a population of about 465,000, Staten Island is sometimes called "the forgotten borough," as it is less well-known than other boroughs, namely Manhattan, Brooklyn, Queens and The Bronx. While Staten Island may not have the claim to fame of other boroughs, it should be noted that the Staten Island Ferry is a large tourist attraction and thus provides out-of-towners with some frame of reference for Staten Island. It is the smallest of the five boroughs in population, and third largest in area, being 59 sq. mi. (approx. 153 km²). -- Source: Wikipedia.com

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