Cedar Rapids Real Estate Trends Report
As the year ends for all of us collectively, we as Realtors like to look at the trends that we have experienced over the course of the year as a tool to evaluate trends for the future. From our collective experiences we have started to see a trend.
Instead of keeping up with the Jones, the new trend is moving down with the Smith's. More and more homeowners are bucking the trend of continually moving up to the next "home bracket" and moving down. Consider the pros and cons of such a move.
Pros
Mortgage payment is substantially less.
Taxes are substantially less.
You have more of a chance to pay down 20% of your loan, thereby eliminating PMI (Private Mortgage Insurance).
Because the size of your house decreases, your utility bills are substantially less.
You know have more liquidity with which to invest, pay off loans, pay off credit cards, etc.
Cons
I've been sitting at my computer for five minutes, and I can't for the life of me, think of anymore "Cons" that would be a disadvantage of moving down. Imagine this scenario.
You have a home that you bought in 2004 for $196,000. You want to sell your home in the spring of 2008. While you lived in the home, you remodeled the bathrooms, replaced linoleum in the kitchen for tile, upgraded all light fixtures and plumbing fixtures. You replaced the roof, and made other small "tuneups" in the house. You sell your house for $235,000 and you pay off your current mortgage which is $188,000. That's a seller's net of $47,000. You find a beautiful older home on the other side of town for $150,000. You put down $40,000 on the house and finance the loan for $110,000. What is the diffence between loan payments? About $700-$800 difference! That's roughly $9,000 a year savings!
What could you do with $9,000 a year?
Christopher Smith
Skogman Realty
www.christophersmithrealtor.com
christopher@skogman.com
319-329-5988
Licensed Realtor in the state of Iowa