BUYING UP IN A DOWN MARKET
Many current homeowners have recently seen their housing needs change. Perhaps they have a child getting ready to start school in the fall, or maybe they simply need more space. Whatever the reason, if your goal is to move into a more expensive home, don't let the market scare you from moving forward.
With local real estate here in Cleveland on a slight downward trend, buyers can take advantage of very attractive home prices. However, for a lot of move-up buyers, the thought of selling their current home during a declining market makes them uneasy. The Schuman Team wants to help those buyers understand that moving up in a down market can make sense.
Please take a look at the following graph. The figures perfectly illustrate what a move-up buyer here in the Eastern suburbs of Cleveland may be facing.
In this example, the owners of Home "A" have experienced a 10% decline in the value of their home. On face value, this seems like a negative. Had the owners of Home "A" sold at the peak of the market, like in 2003 or 2004, they would have also purchased Home "B" at the peak of the market. The difference would have been $200,000.
When the market declines, the price of all homes decline. Thus, Home "B" experienced the same percentage decline as Home "A", yet went down a greater dollar amount. The difference is now only $180,000. Although the sellers feel a "loss" in the sale of their Home "A", they actually realize a net gain of $20,000 in the overall transaction.
So you see, a declining market can be an ideal time to make a move to a higher priced home.
To see all homes currently on the market in the Cleveland area, click here. For a personal consultation or to speak directly to The Schuman Team, call 216-346-3235.
Click below to view other helpful information for buyers and sellers:
Home Staging and Why It Is Imporant To Today's Sellers
Schuman Team Staging Tips - First Impression Is Key
Schuman Team Staging Tips - Define Rooms To Get Top Dollar
The First Step To Buying a Home - Get Pre-Approved For A Loan
Schuman Team Buyer Tips - Tax Credit To Assist Buyers
Cleveland Area Luxury Home Marketing Group Created
Solon Ohio - A Special Community
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If you are looking to buy or sell a home in Bainbridge, Beachwood, Moreland Hills, Orange, Pepper Pike, Solon or the surrounding Eastern suburbs, please contact us as we would be happy to show you why people love working with the Schuman Team.
The Schuman Team uses their home staging expertise to sell listings quicker and for more money. The average home in the Cleveland area sold in over 100 days in 2008 and our listings sold in less than 60 days. The Schuman Team specializes in luxury homes and are members of the Luxury Home Consultants of Keller Williams Realty Greater Cleveland and of the prestigious Institute for Luxury Home Marketing, the premier independent authority in training and certification for real estate agents working in the luxury home market. We also work extensively with buyers and sellers who are relocating in or out of the area. Check out our great relocation package.
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I like it, I like the graph and everything else. Been saying this for quite a while now and still trying to get people to figure that out.
Cheers!
Good graph.
I don't see why move up buyers should be reluctant to buy in this market. It is six of one and half a dozen of another.
Assuming they have a good agent, selling and buying is not any different in this market than it was five years ago.
Dan and Amy, I put up a post the other day saying the same thing. In fact when you figure in appreciation in the next several years you really see where its a smart move to move up now!
Chris and Mark - thanks for commenting. Sometimes a visual like this will help people understand that now is a great time to move up.
Great post. Once you begin to show people thinking of moving up the benefits of doing it in todays market, you instantly take the gloom and doom that everyone has been putting in their heads, and replace it with opportunity.
Brian and Marie - Thank you for your comments. I just read your post and found it to be very informative. Let's hope the move-up buyers recognize the great opportunity they have right now.
Joshua- We appreciate your comments as well. You hit the nail right on the head, today's market offers "opportunity".
By the way I like the pose in you photo!
Brian.
Dan, Congratulations!! Your first gold star and great content. Simple and believable.
LOVE the graph Dan and Amy!! When friends or neighbors say, "I guess now is not such a great time to buy with the economy being what it is?" I always counter with, "It is an EXCELLENT TIME to buy if you are looking to upgrade. Not such a great time for those that want to downsize, however." It is also an awesome time to buy rental properties if you have the time to manage them.
Great visual
Love the graph. I explain this all the time to buyers and they seem to get it.
I think the graph is really helpful.
Dan and Amy,
That graph really shows a buyer exactly what the advantages of moving up in today's market really is. Congrats on the feature and happy blogging!
Hi Dan and Amy -- Congrats on your featured post from a fellow Cleveland agent here. Great advice to help buyers keep the market in perspective. Your clients are very fortunate to have such a skilled team representing them.
Best wishes to you both and all the KW team in 2009!
It is just one of the many reasons to buy today. Great post and happy blogging.
Hi Amy and Dan, It's such a good idea for clients who need or want to secure that bigger house to act now to secure a more modest price on the bigger house as well as low mortgage financing. That can be a difficult task to convince them when all they hear is doom & gloom on the evening news.
Good points indeed. The other positive is that your house has a larger chance to sell since it's below 200k (if referencing to the graph) and since you would be the one buying the high end property than the seller also benefits as normally their 400, home would be on the market from perhaps 9-12 months.
Dan and Amy~
AppreciAte the graph. For those of us who respond quickly to visuals, it is a Real Treat~
Wow, it looks like we have a lot of people to thank, and are very grateful for all of your kind comments.
Brian and Marie-I just noticed your pose, you have good taste. I don't know about you two, but Amy and I took about 75 pictures together and this was the only one we could agree on. We're not in a hurry to do it again.
Barb- The gold star is nice but I'd trade it for the new listing you got this week from AR. Thanks as always for your comments and have a great weekend.
Sonja, Todd, Kristi, Jason and "Ashville's Green", - Glad you liked the graph. It's one thing to tell someone about the advantages of moving up, but some people do respond better to a visual.
Lisa- Thanks for your comments as well. Amy and I use to live in the MD/DC area and have tons of family and friends there, especially in Potomac and Bethesda. We're actually taking the kids to DC for spring break next month. Where is your target area?
Chris- Thank you so much for the kind words. Hopefully, we'll have a chance to meet and work together. If you ever need our help in any way, don't hesitate to contact us.
Olena- Thanks and happy blogging to you as well. Amy makes fun of me for all my blogging efforts but she realizes it is a great way to communicate. One of these days she'll be hooked on here too.
Marian- You are so right. A lot of people are a little hesitant to make a move and we need to give them a some positive stats, like the graph, to let them know it really is ok to move forward. Hope all is well in Ann Arbor--a great city. My mom is a UM grad and I went to all the homeffootball games growing up as a kid. A really neat town.
Castellum- Very good point. More move-up buyers buying means more sellers getting to move on to downsize and less inventory, a win-win for the entire real estate market.
Thanks again everyone. Amy and I appreciate all of your comments.
Dan
Great post. It's what we've all been trying to tell our clients. The graph really says it all. So the key that many clients are missing right now is: Price your home to sell NOW, so you can take advantage of the really great buys on your next home.
Wouldn't it be thoroughly envigorating if the news media picked up on this and started reporting about it?
Brenda- I think a lot of buyers and sellers are waiting for some kind of respected authority to tell them that now is the time to act. The news media would be very helpful to our cause but they seem intent on spreading negativity---perhaps because that's what sells papers. Thanks for your comments.
Dan and Amy great graph. Great information and I will be sharing this with my clients.
Here in Hawaii I see the same thing happening with second home buyers, except there is a twist. I know of a couple who have stopped making mortgage payments on their $1.5 million oceanfront condo, and intend to trade up to a $5 or 6 million property that would have been $7-8 million at the peak.
Vanessa - Thanks for commenting. Please share with your clients, I hope it is helpful in getting them to understand that now is a good time to move up.
Beth- Thank you for your comments as well. I am amazed at the prices of homes in Hawaii, but I guess it's all relative. The principles of moving up in a down market are still the same.
Good post, but still I'm spending time online and on the phone with several young couples who have a house but need a bigger one. In each case, the wife wants to make the move now, but the husband wants to wait. It's an interesting phenomenon.
Joetta - Seems like the men are always the roadblocks, but they don't necessarily make the final decisions. Some people, men in particular, like to see numbers and are more analytical, they also like to get a "deal". Try sending them the chart to make some sense of the situation, and once again, emphasize the great "deals" they can take advantage of. They won't all be willing participants, but getting them somewhat on board can help. Thanks for commenting.
Yes, but it's still difficult to convince people of this. I have had several potential clients tell me that they are going to sit on their current house for a while longer or refinance and add on or... Thanks for the post.
Kelsey- You are so right. We can give clients charts and scripts but people are still afraid to make a move. Considering the state of the economy, I don't blame them but sometimes a little push can help. Even if a buyer has already decided to move-up, giving helpful information can help solidify their decision to do so and make them feel more comfortable. Thank you for your comments.
While I like your idea you are making a flawed assumption. Did all prices decline equally in the Cleveland market? It might be true but I doubt it. Here in Denver, CO homes have declined, but it is not the same at all price points. The higher priced homes actually have declined more than the lower priced homes. This indicates that it actually makes even more sense to move up.
Your point is true, but I'm a stickler for logic and assumptions.
Mike- Thanks for your comments and point well taken. I wrote the post with the intention of sending it to our sphere here in Solon, a pretty affluent suburb that has seen a slight decline across the board. You are right, the price decline probably varied, but we wanted to keep things simple.
I want to sell my current home and move into a larger home because I see so many deals daily. I am not sure that I want to take a loss on my current residence. So I am in this catch 22.