With the overall improvement of the real estate market from the past 24+ months, many home owners are now whispering about a topic that was considered dead. The topic has actually turned in to a question; do we have enough equity to move up to a bigger, better home? In most areas, the answer is a resounding yes.
New Data Points to Positive Trends
RealtyTrac recently released a report that shows over 18 million home owners have a minimum of 20% equity. That figure represents almost half of all homeowners.
Another positive note; while the average price of a new home continues a steady increase, so too are the prices of existing homes. This means that a current homeowner has an appreciating asset, even though the home they wish to buy may be slightly higher now than it was last month. With the improved equity position these buyers will have more money to use as a down payment and therefore will not be hampered by any fluctuation in mortgage rates that may happen over the next several weeks.
Shuffling of Inventory
The sale of homes priced above a million dollars increased by more than 35% in 2013. This means that the buyers looking to move up in home may take a bit longer than usual since the number of available homes may be significantly reduced. However, when a large number of people sell their first home to move in to a better home, it is great for the economy.
People looking to get that first home will have more properties to consider. People that are moving up in homes obviously have more discretionary income to use for items beyond basic living needs. This means that the overall number of home owners will rise while at the same time ancillary spending will also increase.
Making the Process Easier
For people looking to sell a home and buy another one almost at the same time, there are a couple of things that can be done to make the process easier. First of all, you may ask your selling agent to make a note on the local listing directory that your home will be sold as long as you are able to find another property to buy. This is a contingency clause. Second, it is possible to negotiate a short term rent with your new buyer. This means that you would pay rent to the new buyer for a couple of months while you finish the purchase of a better property.
With the sale of existing homes increasing at their highest level since early 2007, it would seem that the overall real estate market is finally over the hump of the recent recession. With the price of the average home increasing at double digits, this marks a perfect time for people to finally sell their existing home and move up to that dream property that they have desired for so long.