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 Palmdale, CA

Latitude: 34.581005 -- Longitude: -118.100603

Other Area Cities: Lancaster Acton Palmdale

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Palmdale, the first community within the Antelope Valley to incorporate as a city (on August 24, 1962), is located in the northeast reaches of Los Angeles County, California, United States, separated from Los Angeles by the San Gabriel Mountain range. As of the 2000 US census, the city had a total population of 116,670. As of spring 2005, the city proper has a total population estimate of 143,227, according to Palmdale municipal government sources. As of the 2005 population estimate, the Palmdale / Lancaster, CA Urbanized Area (a US Census Bureau defined term) has a population of 480,238. While Palmdale is still a part of Los Angeles County, the urbanized centers of Palmdale and Los Angeles are separated by the San Gabriel mountain range, which is about 40 miles (60 km) wide. This range forms the southern edge of the Antelope Valley portion of the Mojave Desert. Palmdale is one of the two principal cities of the Antelope Valley. -- Source: Wikipedia.com

California 2000 Census Population Profile Map

	Palmdale	California	United States
Population	116,670	33,871,648	281,421,906
Median age	28.2	33.3	35.3
Median age for Male	26.8	32.2	34
Median age for Female	29.4	34.4	36.5
Households	34,285	11,502,870	105,480,101
Household population	116,576	33,051,894	273,643,273
Average household size	3.4	2.87	2.59
Families	28,105	7,920,049	71,787,347
Average family size	3.72	3.43	3.14
Housing units	37,096	12,214,549	115,904,641
Occupied units	34,285	11,502,870	105,480,101
Vacant units	2,811	711,679	10,424,540

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