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When is better to move - before or after the housing bubble bursts?
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My husband and I currently own our home and are looking at upgrading to a bigger house in the next year or two. The housing market right now in our area (US East Coast city) is doing really well, and our home is valued much higher than it was when we purchased it. However, with all of the new expensive developments popping up, I strongly suspect that the housing bubble here is going to burst soon.
On the one hand, if we wait until after the market turns, then buying our new place will be much cheaper than if we moved earlier. On the other hand, waiting would also mean losing value in our current home we would be selling. Considering that we would be looking to both sell and buy property around the same time, is it better to do it when the market is up or after it makes a downturn?
I have seen both this question and this question, but they are both specifically about going from renting to owning, while we already own.
real-estate housing bubble
asked 1 hour ago
David K
1285
add a comment |Â
up vote
1
down vote
favorite
My husband and I currently own our home and are looking at upgrading to a bigger house in the next year or two. The housing market right now in our area (US East Coast city) is doing really well, and our home is valued much higher than it was when we purchased it. However, with all of the new expensive developments popping up, I strongly suspect that the housing bubble here is going to burst soon.
On the one hand, if we wait until after the market turns, then buying our new place will be much cheaper than if we moved earlier. On the other hand, waiting would also mean losing value in our current home we would be selling. Considering that we would be looking to both sell and buy property around the same time, is it better to do it when the market is up or after it makes a downturn?
I have seen both this question and this question, but they are both specifically about going from renting to owning, while we already own.
real-estate housing bubble
asked 1 hour ago
David K
1285
Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
My husband and I currently own our home and are looking at upgrading to a bigger house in the next year or two. The housing market right now in our area (US East Coast city) is doing really well, and our home is valued much higher than it was when we purchased it. However, with all of the new expensive developments popping up, I strongly suspect that the housing bubble here is going to burst soon.
On the one hand, if we wait until after the market turns, then buying our new place will be much cheaper than if we moved earlier. On the other hand, waiting would also mean losing value in our current home we would be selling. Considering that we would be looking to both sell and buy property around the same time, is it better to do it when the market is up or after it makes a downturn?
I have seen both this question and this question, but they are both specifically about going from renting to owning, while we already own.
real-estate housing bubble
asked 1 hour ago
David K
1285
My husband and I currently own our home and are looking at upgrading to a bigger house in the next year or two. The housing market right now in our area (US East Coast city) is doing really well, and our home is valued much higher than it was when we purchased it. However, with all of the new expensive developments popping up, I strongly suspect that the housing bubble here is going to burst soon.
On the one hand, if we wait until after the market turns, then buying our new place will be much cheaper than if we moved earlier. On the other hand, waiting would also mean losing value in our current home we would be selling. Considering that we would be looking to both sell and buy property around the same time, is it better to do it when the market is up or after it makes a downturn?
I have seen both this question and this question, but they are both specifically about going from renting to owning, while we already own.
real-estate housing bubble
real-estate housing bubble
asked 1 hour ago
David K
1285
asked 1 hour ago
David K
1285
asked 1 hour ago
David K
1285
asked 1 hour ago
David K
1285
asked 1 hour ago
David K
1285
1285
Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago
add a comment |Â
Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago
Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
4
down vote
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting if you don't plan to stay in the house for more than a few years.
If you're downsizing, then it's better to move now for the same reasons.
If you're changing areas, then it all depends on the markets in those areas.
All that said, timing any market (including housing) is very tricky and can often work against you. Unless you think there's an enormous bubble (like a 50% premium) then in the long run it won't make much difference.
answered 52 mins ago
D Stanley
48.5k7146156
add a comment |Â
up vote
1
down vote
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you have an $0.8M house and want to buy a $1.2M house, so you only need $0.4M to make up the difference. That's a big assumption that housing prices fall equally in all areas, but you get the idea.
The other things to consider is how easy it will be to sell your current house. Housing prices fall because the demand isn't there. Even with a lower price, you may have more trouble finding a buyer post-bubble, so consider how important timing is for the sale of your current home.
answered 52 mins ago
Nuclear Wang
880612
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
add a comment |Â
up vote
1
down vote
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just effects the size of the numbers on both contracts, and about the same, so it's mostly a wash.
If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least - and sell high, wait after the predicted crash, and then buy low. Obviously, that implies that you rent in between (or live in your car, or with your parents, or whatever). And if the crash doesn't come - because your prediction was wrong - you don't make money on it, but lose the value gain from the period you waited. No risk, no gain.
answered 49 mins ago
Aganju
19k23075
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting if you don't plan to stay in the house for more than a few years.
If you're downsizing, then it's better to move now for the same reasons.
If you're changing areas, then it all depends on the markets in those areas.
All that said, timing any market (including housing) is very tricky and can often work against you. Unless you think there's an enormous bubble (like a 50% premium) then in the long run it won't make much difference.
answered 52 mins ago
D Stanley
48.5k7146156
add a comment |Â
up vote
4
down vote
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting if you don't plan to stay in the house for more than a few years.
If you're downsizing, then it's better to move now for the same reasons.
If you're changing areas, then it all depends on the markets in those areas.
All that said, timing any market (including housing) is very tricky and can often work against you. Unless you think there's an enormous bubble (like a 50% premium) then in the long run it won't make much difference.
answered 52 mins ago
D Stanley
48.5k7146156
add a comment |Â
up vote
4
down vote
up vote
4
down vote
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting if you don't plan to stay in the house for more than a few years.
If you're downsizing, then it's better to move now for the same reasons.
If you're changing areas, then it all depends on the markets in those areas.
All that said, timing any market (including housing) is very tricky and can often work against you. Unless you think there's an enormous bubble (like a 50% premium) then in the long run it won't make much difference.
answered 52 mins ago
D Stanley
48.5k7146156
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting if you don't plan to stay in the house for more than a few years.
If you're downsizing, then it's better to move now for the same reasons.
If you're changing areas, then it all depends on the markets in those areas.
All that said, timing any market (including housing) is very tricky and can often work against you. Unless you think there's an enormous bubble (like a 50% premium) then in the long run it won't make much difference.
answered 52 mins ago
D Stanley
48.5k7146156
edited 6 mins ago
answered 52 mins ago
D Stanley
48.5k7146156
answered 52 mins ago
D Stanley
48.5k7146156
answered 52 mins ago
D Stanley
48.5k7146156
48.5k7146156
add a comment |Â
add a comment |Â
up vote
1
down vote
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you have an $0.8M house and want to buy a $1.2M house, so you only need $0.4M to make up the difference. That's a big assumption that housing prices fall equally in all areas, but you get the idea.
The other things to consider is how easy it will be to sell your current house. Housing prices fall because the demand isn't there. Even with a lower price, you may have more trouble finding a buyer post-bubble, so consider how important timing is for the sale of your current home.
answered 52 mins ago
Nuclear Wang
880612
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
add a comment |Â
up vote
1
down vote
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you have an $0.8M house and want to buy a $1.2M house, so you only need $0.4M to make up the difference. That's a big assumption that housing prices fall equally in all areas, but you get the idea.
The other things to consider is how easy it will be to sell your current house. Housing prices fall because the demand isn't there. Even with a lower price, you may have more trouble finding a buyer post-bubble, so consider how important timing is for the sale of your current home.
answered 52 mins ago
Nuclear Wang
880612
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
add a comment |Â
up vote
1
down vote
up vote
1
down vote
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you have an $0.8M house and want to buy a $1.2M house, so you only need $0.4M to make up the difference. That's a big assumption that housing prices fall equally in all areas, but you get the idea.
The other things to consider is how easy it will be to sell your current house. Housing prices fall because the demand isn't there. Even with a lower price, you may have more trouble finding a buyer post-bubble, so consider how important timing is for the sale of your current home.
answered 52 mins ago
Nuclear Wang
880612
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you have an $0.8M house and want to buy a $1.2M house, so you only need $0.4M to make up the difference. That's a big assumption that housing prices fall equally in all areas, but you get the idea.
The other things to consider is how easy it will be to sell your current house. Housing prices fall because the demand isn't there. Even with a lower price, you may have more trouble finding a buyer post-bubble, so consider how important timing is for the sale of your current home.
answered 52 mins ago
Nuclear Wang
880612
answered 52 mins ago
Nuclear Wang
880612
answered 52 mins ago
Nuclear Wang
880612
answered 52 mins ago
Nuclear Wang
880612
880612
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
add a comment |Â
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
Another thing to be cautious of are moving interest rates. Borrowing 500k @ 4% APR has roughly the same total repayment amount (over 30 thirty years) as borrowing 400k @ 6% APR. If waiting for the market to drop by 20% also allows enough time for interest rates to climb by 2% then your 100k equity savings would be entirely wiped out by additional interest payments (assuming you need a mortgage).
– CactusCake
17 mins ago
add a comment |Â
up vote
1
down vote
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just effects the size of the numbers on both contracts, and about the same, so it's mostly a wash.
If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least - and sell high, wait after the predicted crash, and then buy low. Obviously, that implies that you rent in between (or live in your car, or with your parents, or whatever). And if the crash doesn't come - because your prediction was wrong - you don't make money on it, but lose the value gain from the period you waited. No risk, no gain.
answered 49 mins ago
Aganju
19k23075
add a comment |Â
up vote
1
down vote
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just effects the size of the numbers on both contracts, and about the same, so it's mostly a wash.
If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least - and sell high, wait after the predicted crash, and then buy low. Obviously, that implies that you rent in between (or live in your car, or with your parents, or whatever). And if the crash doesn't come - because your prediction was wrong - you don't make money on it, but lose the value gain from the period you waited. No risk, no gain.
answered 49 mins ago
Aganju
19k23075
add a comment |Â
up vote
1
down vote
up vote
1
down vote
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just effects the size of the numbers on both contracts, and about the same, so it's mostly a wash.
If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least - and sell high, wait after the predicted crash, and then buy low. Obviously, that implies that you rent in between (or live in your car, or with your parents, or whatever). And if the crash doesn't come - because your prediction was wrong - you don't make money on it, but lose the value gain from the period you waited. No risk, no gain.
answered 49 mins ago
Aganju
19k23075
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just effects the size of the numbers on both contracts, and about the same, so it's mostly a wash.
If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least - and sell high, wait after the predicted crash, and then buy low. Obviously, that implies that you rent in between (or live in your car, or with your parents, or whatever). And if the crash doesn't come - because your prediction was wrong - you don't make money on it, but lose the value gain from the period you waited. No risk, no gain.
answered 49 mins ago
Aganju
19k23075
answered 49 mins ago
Aganju
19k23075
answered 49 mins ago
Aganju
19k23075
answered 49 mins ago
Aganju
19k23075
19k23075
add a comment |Â
add a comment |Â
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Is selling now and buying later an option (rent until the market goes down)?
– yoozer8
1 hour ago
@yoozer8 No, we don't plan to go back to renting now that we own. We can certainly afford to buy in the current market, so the current prices wouldn't prevent us from moving.
– David K
1 hour ago
What's your current mortgage? How much of a down payment will you be able to put on the new house in each scenario? How much more will the new house cost compared to the old? I think there are too many variables involved to provide a blanket "sell now"-vs-"wait" answer.
– chepner
1 hour ago