We are all looking for a financial edge to take advantage of the heightened real estate market.
As the Steamboat market continues to be in high demand, many primary homeowners are wondering how they can take advantage of the current market values.
One way to cash out some of the equity in your home is downsizing. There are several advantages and disadvantages, it just depends what is more important to you at this stage in your life.
Possible Advantages:
Save money – When it comes to downsizing motives, typically money rules. If you are spending less on your mortgage, HOA Dues, utilities and overall maintenance you have more freedom to live your life more comfortably.
More time – Less house plus less yard equals less maintenance and less projects. DIY can sound atttractive until you have DIY’d yourself into a never ending honey-do list (just ask my husband). But for real, downsizing can give you back your weekends so you can spend more time with your friends and family.
Reduce stress – With more financial stability and time to enjoy your life you are ultimately left with less stress in a world that can be very stressful. Taking some of the overwhelming financial and physical demands of a larger home off of your plate can feel like a huge weight has been lifted.
Possible Disadvantages:
No room for guests – This is a big one for Steamboat. Living in a tourist town, sometimes I feel like I am running a Holiday Inn at my house. Fewer out of town guests staying in your home might sound like a relief, but for those who love hosting family and friends, holiday dinners, or even a small dinner party, this could be a big loss.
Less elbow room – As we all experienced more time in our homes this year, many people are looking for more elbow room. Downsizing will result in less room to get away from family members to enjoy private, quiet time or just gather yourself. It will also result in needing to sell or give away personal items like furniture, kitchen supplies, etc. Many people form emotional attachments to their personal property so this can be challenging.
Less prestigious - While most people won’t admit it, the reality is sometimes appearances are more important than comfort levels. For homeowners who place a great deal of importance on how they are perceived by others, a smaller home might not project a coveted image of financial success.
What comes first, the chicken or the egg?
Should you buy or sell first? In a seller’s market it can be very challenging to get a seller to accept an offer if you have to sell your current house first to be able to purchase. As of December 2020 our active listings are down 54% and number of sold listings are up 21%, meaning our inventory continues to get tighter and tighter while the demand continues to increase, a recipe for increased values favoring sellers. To take advantage of a sellers market and position yourself competitively as a buyer, it is typically best to sell your house first and then find your next home, though every situation is different. Give me a call and we can discuss the best strategy that will work for you.
