Have you decided to hold off selling your current home and buying a new one because your home may not be worth what it once was? Why? Investing in a down market can be very advantageous.
Suppose your home was worth $200,000 in 2008 but has lot 20% because of the sluggish economy. That would make the value at $160,000. I know you are thinking, "But I just lost $40,000. How is this a good thing?". Well, the same market that dipped your value 20% also caused the home you are going to buy to drop by the same amount. It's all a matter of perspective. So, let's say you want to buy a bigger home to accommodate the growing family (remember those two weeks last winter when no one could leave their home???). The house that fits you perfectly was on the market in 2008 for $350,000 but because of the same sluggish economy, the price is now 20% lower at $280,000. Taking the $40,000 you "lost" on the sale of your home and factoring in the $70,000 drop in purchase price of a larger home in the same market you now have a net gain of $30,000! And, when the market recovers (and it will recover), your new home will appreciate at a higher dollar amount (10% appreciation on a $200,000 home is only $20,000 while 10% appreciation on a $280,000 home is $28,000).You can choose to look at the market in one of two ways. I say, let's look at it in a positive way. As I said before...it's all a matter of perspective.
