New answers tagged housing
3
One reason you might care about whether the housing market has gone up or down is your own financial situation. If you are tight on cash but not cash flow, you might want to use the equity in your existing property to roll into the down payment on a new property.
Let's say you bought for £100k, you put £20k down, and the property is now worth £120k. ...
4
Depends on what the original price for the house you're moving to was compared to your previous house. Suppose that you own a $500,000 house, and were looking at buying an $800,000 house. While you're considering your decision, both houses go up 10%. The price difference is (800,000 * 1.1) - (500,000 * 1.1) = 330,000 rather than the original $300,000 ...
3
You're correct that in theory it should't matter; "sell low + buy low" is effectively a "wash sale" in terms of your equity.
But you bet you care. If you are trading a house when the market is soft...
You may not be able to get financing
The reason prices went up in the first place is that you had many people bidding on the available housing stock, and ...
4
yes, you do. Its an ironic situation where people with housing think they're getting richer when house prices go up.
But consider this: years ago, you might have bought a flat in London for £100k (yeah, 20 years ago!) and moving to another one would set you back, say 1% estate agent fee and no stamp duty - or £1000.
Imagine that flat doubles in price, now ...
1
House price fluctuations are going to affect your loan-to-value (LTV) ratio when you move. That can dictate the amount you're eligible to borrow and the rate offered.
Simple example: You have a £25k deposit which you use to buy a £100k house (clearly not an example tailored to your location). Your LTV is 75%.
If house prices in your region have risen by an ...
-3
Property that you live in is not an investment since if it goes up, so does the house next door, and if it goes down, next door goes down too. Unless you are changing market as you have described, then it doesn't really matter which way the market goes (and I don't agree with your negative equity argument - the fact that you owe more then you own doesn't ...
6
Houses don't all appreciate at the same rate.
You'd care a LOT if, for example, the house you're selling appreciated 30% in the time you've lived there, but the house you're buying has appreciated 60% and happened to by 3x as expensive when you bought the first house.
£100,000 x 1.30 = £130,000
£300,000 x 1.30 = £390,000
£300,000 x 1.60 = £480,000
What ...
12
You care if you’re trading up or down, which is very common. The amount that you have to pay to trade up, or receive when trading down, shrinks and grows with the average house price.
You also care about the effect on the ease of buying and selling. Generally speaking, in a booming market it is easy to sell but hard to buy, while in a declining market it’s ...
36
There are often taxes (by whatever name) that scale with the property price. Agents’ fees are also often a percentage of the property price. These costs are usually a small but noticeable percentage of the total price.
Aside from this, you’re mainly looking at the difference between what you get and what you pay. If you are buying and selling properties at ...
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