High Tide Raises All Ships

We've all heard the saying before. In real estate, when the market is hot and home values are going up, usually all home values are going up - even yours. Unfortunately and fortunately when the market turns south, now the value of your home is going down too.

I say unfortunately because nobody likes to see the value of their home go down. However, if you are wanting to sell your home and move to a larger, more expensive home, this falling tide may work in your favor.

Example: Lets say you think your home is worth $300,000, based on your local real estate market over the last 12 months and you've had your eye on a particular model in a new development, priced at $350,000. If your local market has actually cooled in the last 6 months and values have dropped an average 10%, then your home is now only worth $270K. That's $30,000 less than before. Sorry. The good news is that the $350K home you want to buy has probably also dropped in price through builder incentives and rebates an average 10% or $35,000. In this scenario, you just got $5,000 closer to your new home!

Remember, home values are relative. Your home is not in a vacuum. It's value is affected by the same market forces affecting all homes. If you want or need to move, there's never a bad time to by a good home that's fairly priced.