Think you missed the boat on owning the house of your dreams after the housing bubble burst in 2006? It turns out that 2013 is an even better time for you to move up to a new home.
Since the housing market crash, home values are about 20% less today. Take a look at the example above, a house valued at $300,000 in 2006 is currently valued at $240,000, a “loss” of $60,000 in overall home value. However, if you consider moving up in house value, a home that would have been $450,000 is now valued at $360,000 — a savings of $90,000. This results in a $30,000 net gain for a move up seller. Plus, a higher valued home appreciates faster.
According to the Home Price Expectation Survey (HPRE), analysts called for a 3.1% increase in home values by the end of 2013. Here we can see the current price of the starter home of our homeowner. Based on the numbers above, the current home price is at $240,000. With the HPRE appreciation rate of 3.1%, by the end of 2013 the starter home would be worth $247,440, a future gain of $7,440. The new move-up home is currently worth $360,000 and after a year of 3.1% appreciation would be worth $371,160, a future gain of $11,160. By moving to the larger home today, the gain in home value after only one year would be $3,720. Coupled with the initial savings of $30,000 by waiting to buy until after the bubble-bursting depreciation, savings add to a total gain of $33,720. The numbers don’t lie — now is an even better time to buy the dream home you have always wanted, even compared to the housing market of 2006.
Tags: dream home, home appreciation, home appreciation rates, Housing Market, move-up buyer, move-up seller, Q4, Quarterly Newsletter, real estate market, real estate trends, shorewest, Shorewest Realtors