That would be my first response as a homeowner. Only a sales person could say that with a straight face; because this is a buyer's market, the likes of which have never been seen. Banks are trying to dump their foreclosures. Short sales abound. And foreign buyers are coming into South Florida with cash driving prices down even more. Why would I want to sell now?
While all of the negatives are there to be seen, if we look carefully, there is a significant financial windfall available to a very large group of homeowners with equity in their favor.
DataQuick statistics report of average sold properties between 1999 and 2009 indicates that the general Weston area (33326) accumulated 48% in equity value for 1999 buyers who still own the same home. The “real-ity” of real estate is that most people do not understand how to use equity in their property when the market turns down because it last turned down like this more than 53 years ago.
The difference between that downturn and this is twofold. First, foreign nationals make up a significant number of south Florida buyers today because of a weak dollar. That wasn't the case 53 years ago. Second, we have an aging population of baby boomers today and they were the babies about to be born in that market 53 years ago.
Equity profit in a down market is all about shifting equity for value. That is, not buying a “bigger" house, but buying a better lifestyle for the same amount of money created by one's current equity. If you are in the normal mode of life event house issues (growing family, better school choices, a loss, divorce or marriage), then, as a seller, you are at a market disadvantage in a down market. But, if you are a home owner with a decade or more of equity and little or no 2nd mortgage hits on your equity, then selling now is an opportunity. Buying now with the intent of growing your equity over the next 10 years can be even more profitably than it was in the last 10 years in the house you are in. Here is why.
Suppose the home you purchased 10 years ago was a 3BD/2.5 bath property and that you paid $170,000 then. Today, in your zip code of 33326, your 3/2.5 is now selling at $192,000 (avg median sold). So, you have an equity value of $22,000, even after the 30% drop caused by the market fall in your area. If you want to profit from a sale then you simply begin looking for a property to buy with your equity value in those areas where the down market has reduced value greater than your 30% loss. Sales profit and your government stimulus ($6,500 - $8,000) in an area that has taken more a drop and meets your new needs for social, work and health amenities becomes a new value for you in a down market. If you have made certain value added improvements in your current home, (kitchen, bath, HVAC, Roof), that improve your equity your purchasing power will be further enhanced when you sell.
In today's market the equity in a home is significant. So too, are lifestyle changes. Lifestyle changes – turning homeowners from family-raising parents to baby boomers with children who are on their own. Equity and the freedom of aging may be the perfect opportunity to take advantage of the current market to sell the large family roost and make a quality of life smaller home purchase for its amenities and security. Before making any investment strategy decision be sure to consult with a qualified professional accountant and/or attorney.