Next spring I want to…
I went to some open houses last Sunday with people who are not buying a house this year. What was I doing there? The goal was to see houses that will be comparable properties for their proposed house hunt next year. They currently own a starter house and intend to trade up before September 2012.
This is what happened:
House Number One was solidly in their preferred price range. Not a stretch. It was in a neighborhood they are very fond of.
He said: “If this was on the market next spring, I’d want to make an offer!”
She said: “This is close, but it isn’t my ‘forever house.’”
They both agreed the yard was too small. She would solve it with landscaping; he would solve it by using the local park.
Location: A, Size: B+, Condition: A. Price: Acceptable.
House Number Two was over their price range.
It was in a different location, where there was a lot more space between the houses. The yard was big and flat, but abutted non-residential property. The house, itself, was much too big for them.
They both agreed that the house was more than they need. He thought they could do without three or four rooms; she would be happy do without two of the rooms. Less space would cost less. A house with fewer rooms -- that was similar to this -- would be in their price range. A yard this size would be within their limits. But, that house will be farther from the town center, like House Two.
Location: C, Size: C, Condition: A. Price: Above price range.
Are they encouraged? Sort of. The first house tells a better story. A house that entirely meets their needs, in the part of town they love, is possible. It just doesn’t answer every want. It might be a little too small for her. We will be watching to see what happens with the sale of House One. The sale of House Two is less important to this couple now, since they both value the in-town location more. But, they will watch the marketing of House Two, as well. If it doesn’t sell or sells for less than asking, it will be a good sign.
I am on record here at BREN that I think that starter housing is not in the best financial interest of house buyers. It is economically better to buy one house and stay in it. Trading up is too costly. As an agent, I offer obedience to lawful instruction, so I will help people buy starter houses, once I have said my peace.
The advice I give anyone who is thinking about a trade up next spring is to watch the market now. What advice do you want to give these potential trader-uppers? They are going to make this move, with or without the blessing of the bears.
