Is NOW a good idea to downsize in a hot seller’s market?
There’s no doubt about it. If you were to sell your home in the North Okanagan this summer (2017), the asking price of your property will be close to or exceed record highs.
The housing demand for local buyers and buyers from outside of the Okanagan is very strong while the inventory of quality move-in ready homes for sale is substantially below average. These two factors can create the perfect environment to downsize and make some serious money if done right.
Below are a couple of scenarios to consider if you are considering selling over the summer.
Scenario 1 – Sell and downsize now
In hot markets the primary obstacle to selling can be that the next home you purchase will also have the increased market price. All of your incredible gains that you would have made when selling your home could be lost again when buying another of equal value.
Downsizing in a hot market is a bit of a different story. The increase in price of a home of less value could be substantially less. For example, If market prices increase by 20% during the summer on a home valued at $500,000, you will have a market gain price of $100,000 ($600,000 selling price.) Meanwhile if you were to purchase a $300,000 condo, with the same 20% increase of $60,000 you could actually bank the $40,000 difference.
Keep in mind that the types and values of homes will be effected by the market differently but in general the case show above can be considered.
Scenario 2 – Sell now and downsize later
The Okanagan has a history of much higher pricing over the spring and summer months. While scenario 1 is attractive you can boost your earnings by selling you home now (spring/summer) then buying your new place in the late fall or winter when the market has cooled down. Selling your $500,000 home at its peak in the summer may give you the market gain of $100,000 that you can cash in on. Then when market prices level off again in the late fall or winter you can purchase your $300,000 condo. With the added profits you can store your items then take the vacation of your dreams (or stay at the kid’s) until you’re ready to buy your next home.
So, selling in a hot market may be a good decision if the right conditions are met. If you’re thinking about selling contact me (Kari) and let’s make a plan for your to get the maximum opportunities.