Although officially still in the throes of a Buyers Market, the Augusta GA real estate market is definitely showing signs of correction. So should you buy now? That all depends! Do you have a home for sale? If you’re considering a move up, now is definitely the time to do it. If you’re downsizing, I would hold off for a while if possible to maximize the financial gain.
What do I mean? Let’s say we’re in a Buyers Market and homes are selling for approximately 3% less than they were 2 years ago:
- Upsize Scenario – Your home previously worth $150,000 now sells at a loss for $145,500. The home you buy was previously worth $200,000, but you’re able to get it now for $194,000. So you “lost” $4500 on the sale of your home, but you “gained” $6000 in potential equity on the purchase of your new home, for a net equity gain of $1500.
- Downsize Scenario – Your home previously worth $200,000 now sells for only $194,000, for a loss to you of $6000. The home you buy was previously worth $150,000 but you’re able to purchase it for $145,500 for a potential equity gain of $4500. In this case, you have a net equity loss of $1500.
Just the opposite happens in a Sellers Market – you’ll make a gain on your sale, and either lose equity by buying up, or gain equity by downsizing. Quite frankly, this is one of the reasons so many homeowners are in trouble right now. They sold their home in a seller’s market, bought a bigger home for an artificially inflated price, and didn’t live in it long enough for the market to correct.
DISCLAIMER: (also known as “common sense is not so common”) Appreciation and depreciation can never be predicted. My rule of thumb is that you should NEVER buy a home if you’re not planning on living there for at least 5 years. Obviously, the longer you own a home, the greater your chances of building equity.
If you’re in the market to buy a home in the Augusta GA area, here are some popular searches: