Home prices are rarely stable.  The market is normally moving up or down along with the national economy.  According to the Florida Association of Realtors, homes in Florida went up about 10% over the last twelve months.  This is a very strong increase and can’t be sustained in the long run because personal incomes haven’t increased nearly that much—but it is happening right now.

If you plan to sell and downsize, the longer you stay in your current home the better.  This is because the larger, more expensive home you own now will appreciate more dollars than the smaller home or condo you want to move into—assuming both appreciate at approximately the same rate.

If you wish to upsize, you’ll want to go ahead and make your move as soon as possible.  The larger home you wish to buy is appreciating more dollars than your smaller home is appreciating. (If you owned a $200,000 home twelve months ago but delayed moving up to a $300,000 home until now, your home went up about $20,000 and the $300,000 home went up about $30,000, so you lost $10,000 by waiting to make the move.)

Another factor is interest rates.  Rates have gone up slightly over the last year, but rates could be much higher a year or two down the road depending on many economic factors.  If interest rates go up even 1% before you get your next mortgage, your monthly payment on a 30 year fixed rate mortgage will go up more than 12%!  (On a $200,000 mortgage paid off over 30 years, the difference between a 4% rate and a 5% rate is over $43,000.  Shocking but true!)

Here’s our advice if you’re planning to downsize:  If you are happy with your present home and don’t mind the extra maintenance of a larger home, just take your time making a move.  (On the other hand, if you want less to maintain, or if the taxes & insurance are burdensome, then you should go ahead with your move.)

Here’s our advice if you’re upsizing:  You should sell the smaller home and purchase a suitable larger home as soon as you possibly can.  Florida homes are going up in value every month, so you are losing money every month that you delay your move.  (Also, locking in your next mortgage interest rate at the low rates we are seeing right now could save you a huge amount of money over the term of the mortgage.)

We are experts in helping people sell and purchase homes in this area of Florida.  Call us and we’ll make the entire process as simple and smooth for you as we possibly can.