I have heard this sentiment expressed over and over again the last few months. From the outside, it may seem a reasonable question. After all, a lot of the traditional “hold ‘em or fold ‘em” rules say “Hold”. Prices are (hopefully) settling at the bottom of the pre-boom 2003 pricing. Inventory is high, really high. A lot of that “inventory” includes short sales and already foreclosed homes at even lower prices. Is there any reason for someone who is NOT is dire straights to throw their hat into the frenzied ring?  Unequivocally, yes.  

The first group of folks that I highly recommend consider selling, are those who are certain- beyond a shadow of a doubt-that they are going to need or want to move in 5 years or less. I can’t guarantee that prices will be better in 5 years, but I can safely say that we are looking at AT LEAST  5 years before you could expect to do significantly better than you can today. So, if you and your 3 little ones are feeling cramped in a 2 bedroom condo, or mom has moved in and you’ve been calling the sofa a temporary bedroom, or the commute from Everett to Federal Way is wearing thin…it’s time to act. These are extreme examples, of course. I really just want to encourage you to examine your present circumstances and ask yourself; “Can I make this work another 5 years?”. If the answer is not a resounding yes, then call me.

Perhaps you are ok in your current digs, but you have a wandering eye for all of the bargains out there. Remember the chaos of 2005? Trying to buy a home meant standing in line with 10 other buyers who wanted the same home. Now the tables have turned. There are thousands of really, truly motivated sellers who will do just about anything to make a deal with you. If you have considered being a “move up” buyer (larger home, better neighborhood, better view) this is the time to act! True, you will make less on your current home than if you hang onto it, but let’s do the math.

Say your current home would sell for $300,000 but you’d really like to get $350k out of it. You won’t get that right now, and that’s holding you back from selling.  You’ve been eyeing a home with twice the square footage that’s 20 minutes closer to work for $475. In 2006, that home would have been $600k, so it REALLY feels like a bargain.  Still, you are torn. Selling for $300,000 means you are actually going to take a bit of a loss on the house if you purchased it in the last 5 years, and that’s not sitting well with you. You could hold out for 5 years, until your house is again worth $350k. By then, the house you are REALLY hankering for is back up at $600k. Do you see what’s happening? You created a net LOSS for yourself of $75,000. Or, to be realistic, it’s an extra $153,303 over the life of a 30 year loan (and that’s at the currently awesome 5.5% rates).   

 Don’t get me wrong, this is NOT a cry to go out and overextend yourself on a home you can’t afford. In fact, lenders have tightened up their guidelines, thank goodness, so that it’s pretty hard to do that. It’s just a nudge to explore your options.

If you know you won’t qualify for a different house, and you are able to make your payments- I definitely recommend KEEPING your home if at all possible. There’s too many tax benefits and too much wealth building potential to choose renting unless it’s absolutely necessary.  

Lastly, and back on topic, the tax credit expires the end of June, and homes need to be under contract by the end of April. Although there will still be people who buy and sell, I do expect to see a noticeable decline in activity- meaning now is a better time than later to get your house on the market and in front of buyers.

If all this makes about as much sense a broken piggy bank, call or email me for a consultation.