So, you’re considering selling your intercoastal-view, Treasure Island or St. Pete Beach home or condo, and moving accross the street to the big Gulf of Mexico view. Or maybe you’re wondering if it’s time to sell your single-family home in St. Petersburg and head downtown, maybe to Old Northeast, or to a waterfront home in Snell Isle. Is it smart to sell now and buy up? What about all that equity you lost by not selling sooner?
The fact is that a buyer’s market is a trade-up market, because smaller losses at sale can be made up by larger savings at purchase. Let’s look at a typical scenario:
Let’s say you can sell your current home for $250,000, and you want to buy a waterfront home for $500,000. And let’s assume for this scenario that prices have fallen 20% accross the board and changed from a seller’s market to a buyer’s market:
| Buyer’s Market | Seller’s Market | Price Decrease | |
| Current Home | $250,000 | $300,000 | -$50,000 |
| New Home | $500,000 | $600,000 | -$100,000 |
While you may have to take $50,000 less for your current property, you’re also paying the same percentage less, or $100,000 in this scenario, for your next property. That’s a $50,000 benefit that more than makes up for your loss in equity. And since the high-end market is very soft right now your gain on the purchase may be even greater.
Also in your favor is that real estate values are cyclical – historically prices have always returned to and exceeded their former levels after a decrease. Eventually prices will increase, and when they do the value of the new property will increase right along with the market and bring you higher gains than a lower price property.
That Pass-A-Grille bungalow is looking better and better…
