Selling your present home and buying another one takes contemplation, reflection, insight and research. But let’s be real. You have many reasons why you want to move into something different. It could be that it’s too small for your growing family. It could be your home is too large now that all the kids have moved out. It could be that you just don’t feel like your neighborhood fits your needs.
“People usually get another house because something has changed in their life – a change in jobs, family size, increase in income, need a change in climate, or whatever else it might be,” said Mark Wehner, senior vice president of agent development at NP Dodge Real Estate, Omaha, Ne. He also serves as president of the Omaha Area Board of REALTORS.
“Sometimes, people just need to sell their home while there is equity in the house. Some just want more amenities. There are a thousand reasons why they want a different house,” he says.
Here are some of the top reasons it might be time to buy another home and sell the old one:
1. Finances. It could be that your income has gone up or down, and you need something better suited for the money coming in.
“For instance, someone might have bought the house they live in 15 years ago. But they got laid off,” Wehner says. “I’ve had friends get laid off with 30 plus years at a place. They got laid off without full retirement benefits. It’s scary out there. Job security — it’s up there with Santa Claus and the tooth fairy.”
Now, many of these people he knows need to downsize to be able to afford a home and get out as much equity from their home as they possibly can. And for those who want to move up because they have better finances now, they will see a little better buying power today in the marketplace, Wehner says.
2. Maintenance. As people age, they no longer want to deal with snow shoveling, lawn mowing, hedge trimming and just overall maintenance. A condominium situation or retirement village becomes a better match for their needs.
3. Equity in the Home. According to CoreLogic, a data and analytics company, home prices have risen in 371 of the 401 metro areas tracked by the company. That has pushed the median price for existing homes to $185,038. That is good news for someone who has been waiting around for their home price to rise after housing prices plummeted during the housing and mortgage fiasco which started about eight years ago. Among cities with populations of more than 250,000, the prices have seen the largest increases ranging from 11.4% to 20.5.
However, Wehner said that for those who bought a home in 2005 or so, they might have the exact same equity they had it in it 10 years ago.
4. Proximity. Real estate agents have always talked about location being king. Well, it still remains a big priority.
“Today disposable time is worth more than disposable income. If I’m commuting two ways for three hours a day, but now I can find a house that is just ½ hour one way, what’s the worth to me and my family?” Wehner says. “With shorter commutes, you aren’t missing family events.”
People want to be close to their lives, families, friends, schools, jobs, favorite shopping areas, public transportation and whatever else is important to them. Also, many Baby Boomers are moving closer to their children and grandchildren once they retire.
5. Space. You have three kids and are expecting a fourth. That three-bedroom, one bathroom house has become like a doll house with no room for anyone or anything.
“It’s all about your lifestyle. You can need more space or you may want to downsize,” Wehner says.
For instance, he and his wife are empty nesters now and they enjoy a very large home with 3,000 square feet upstairs and 1,600 square feet on the main level.
“We just put in a swimming pool. We are both still working, and the payment is easy on us. We have plenty of space, and we like to entertain. That’s why we just put in the pool,” he says.
6. Interest Rates Still Low. “We are seeing interest rates still hovering at the 4 percent range. Ten years ago, they were at 9 percent,” Wehner says. “The affordability is still there. But what is holding people back is consumer confidence. It’s tough for people to sign a mortgage for 30 years.”
Buying also continues to be cheaper than renting in most markets, according to a report this year by Trulia, an online residential real estate site. The research compares the costs of owning and renting assuming buyers get a 4.5 percent mortgage rate on a 30-year fixed term loan with 20 percent down.
Apply to Buy your Next Home
If you want to move up, move down, or just move away, now is a great time. Home prices are reasonable and mortgage rates are low. Apply to buy your next home here.