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 Duluth, MN

Latitude: 46.780373 -- Longitude: -92.117079

Other Area Cities: Cloquet Duluth Superior Hermantown

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Duluth is the county seat of St. Louis County, Minnesota, United States. As of the 2000 census, the city had a total population of 86,918. Taking account of the growth of the city and its boundaries, there are around an extra 92,000 people on the outer boundaries, making the population (including outer suburbs and villages) 184,000. It is a seaport at the westernmost point on the north shore of Lake Superior. It is linked to the Atlantic Ocean 2,300 miles (3,700km) away via the Great Lakes and then either the Erie Canal/New York State Barge Canal or the Saint Lawrence Seaway; it is farther from the ocean than any other deep water port. Duluth forms a single metropolitan area with Superior, Wisconsin, together called the Twin Ports. The two cities share a harbor and are one of the most important ports on the Great Lakes. Among the items shipped out are iron ore (taconite) and grain. -- Source: Wikipedia.com

Minnesota 2000 Census Population Profile Map

	Duluth	Minnesota	United States
Population	86,918	4,919,479	281,421,906
Median age	35.4	35.4	35.3
Median age for Male	33.1	34.4	34
Median age for Female	37.4	36.3	36.5
Households	35,500	1,895,127	105,480,101
Household population	80,357	4,783,596	273,643,273
Average household size	2.26	2.52	2.59
Families	19,918	1,255,141	71,787,347
Average family size	2.9	3.09	3.14
Housing units	36,994	2,065,946	115,904,641
Occupied units	35,500	1,895,127	105,480,101
Vacant units	1,494	170,819	10,424,540

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