Trading Up in a "Down" Market
Borrowed this morning from my esteemed colleague, Duncan.
As in most jurisdictions, the "high end" is not selling well. (In rural Ontario, it's not selling at all but that's for another day.) This means the buyer who is selling cheap (example, $375,000.00) and buying expensive (example, $725,000.00) will benefit financially at both ends.
The lower price range is selling well and so the final sale price won't be discounted all that much. However, the higher price house they will offer on will take a serious hit and so the gap between the buying and selling will be much less than it would have been 6 months ago.
This is an example of how it's being played out in today's market.
Before: It would have gone like this. Offer $850,000.00 on a house listed for $775,000.00 then list present home for $399,000.00 and maybe sell for $425,000.00. (Then again, it may have only sold for $399,000.00.) The difference is $400,000.00.
Now: It would go like this. Buy new home for $725,000.00 from a list price of $799,000.00 (or more) conditional on the sale of the primary residence. Then list said residence for $399,000.00 and sell for $375,000.00. The difference is $350,000.00. You win by saving $50,000.00. With today's interest rates, this move is looking better and better each day.
Cheryl Bower-RE/MAX Hallmark Realty
416.486.5588
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