Time to Move Up to a Bigger Home?

What a difference 6 months makes. Beginning in April, the Pleasanton, Dublin, San Ramon, and Tri-Valley real estate markets began a strong come back which is continuing this Fall. As we have discussed, the new strength in the market is focused predominantly on the lower price ranges. Indeed, homes priced under $800,000 are have been seeing strong activity and shrinking inventory, which could certainly be an indicator that the market is stabilizing. As you go up in price, however, the market gets softer, and once you get over $1,200,000 or so, the market starts to soften appreciably. And once you get over $2 million, the market is soft, with lots of inventory and relatively few sales.

As a result of these dynamics in the market, we have conditions that are perfect for potential move-up buyers looking to upgrade their house or their neighborhood. Indeed, if you own a house in the lower price ranges, you have the best of both worlds… strong market conditions on the selling side, and soft market conditions on the buying side. How often have we heard the axiom “buy low and sell high?” This is a reality for some move up buyers right now. In fact, you would be hard pressed to find a time in recent memory where the price gap between the house you sell and the move-up house has been smaller. This presents a great opportunity for those who can take advantage of it.

So is it a good time to move up into a larger home? In many situations, the answer is yes, especially if the following are true for you:

* You have excellent credit. Lenders rely on credit now more than anytime in the recent past. The better your credit, the better the rate and terms you are able to get in the market today
* You have a stable job. If your job is stable and your see very little risk in losing your job, it is a great time to leverage that certainty into a great deal on a move up home
* You have a long-term outlook. If you are looking at living in your move-up house for at least 5 -7 years, you will likely look back on this as one of the best moves you have ever made. A long-term outlook makes short term volatility in the market irrelevant.
* You are decisive. In times of uncertainty, it is those individuals who are decisive who tend to make out best. If you have trouble making decisions or are prone to second guessing yourself, you might be better off waiting until the market is hot and all indications are up. Of course, you won’t get as good a deal on the buying end, but you will have more certainty.

This market certainly presents some excellent opportunities, but it also has its challenges, especially if you pursue a short sale, where you might go 2 to 6 months before you get an approval. But if you are flexible, decisive, and financially stable, there are some incredible opportunities available right now.