Does Moving Up Make Sense? Five Questions Move-Up Home Buyers Should Consider

Is now a good time to buy?  Only you can decide that ... answer the questions and figure out if you should be taking advantage of the current market conditions.

Today’s housing market presents considerable opportunities for potential home buyers with the right lifestyle reasons and job security. Prices are stabilizing across much of Canada, interest rates are still at historic lows and inventory levels remain consistent.

Even amid such incentives, many move-up home buyers remain on the fence about making the lifestyle change they desire due to the concern over selling their current property.  

Consumers today are benefitting from the price corrections many markets have seen over the last few quarters.  So while they may have seen the value of their current home decline, they are also finding that the “move up” home has also seen a beneficial price reduction. 

For example, the difference in a 20 percent price decline for a $300,000 to $400,000 home is $20,000.  And, when the market improves and price appreciation returns, the more expensive home will see a higher dollar increase.

While potential home buyers are likely aware of the positive impact of record-low interest rates, inventory, tax benefits, and affordability of purchasing today, many are confused and concerned if now is indeed the right time for them to buy. Below are five questions to help “move-up buyers” decide if now is the right time to make a move:

1.      Have you built substantial equity in your current home? Home equity can be defined as the value of a home, minus the amount of outstanding debt.  Although equity does not generally develop in the first few years of home ownership, five or more years of home payments may create significant unrealized gains.  

2.      Has your income or financial situation improved? Homeowners should consider their overall financial situation including current and future expenses in order to make an educated decision on price range for a new home. For example, an increase in salary may allow for an increased mortgage.

3.      Has your lifestyle changed? Lifestyle changes are one of the most common reasons people choose to move. Starting or adding to a family may require an extra bedroom or additional square footage, as well as a desire to live closer to work or family may provide the impetus for a move to a larger home.

4.      Is your current residence one that could potentially be rented out? For those homeowners who are ready to make a move but are concerned about purchasing a new home before the current property is sold, renting out the current residence may be a viable option. 

5.      Are interest rates attractive? A low interest rate means lower mortgage payments on homes of the same price.

If you need more information or have any real estate questions feel free to contact me directly.