Articles Tagged "Downsizing"

Paige Shipp, regional director with housing analyst MetroStudy Inc. fears home sales might slow next year in the ramp up to presidential and congressional elections.  "We typically have much slower selling seasons right before an election," she said. "After that happens, the flood gates open and people come out. It's not a matter of who wins."   Worries about a recession may also impact the home market.  "We spent the better part of the last decade still looking over our shoulder," said George Ratiu, senior economist with Realtor.com.  "The last recession was so bad that we are still carrying some of the scars from that."   However, Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University states that Texas economy is still expanding.  "And we are extremely unlikely to be in a recession by the end of this calendar year," he said. "We are probably pretty safe through the first six months of next year."

• Dallas Morning News, October 14, 2019

The number of homes listed for sale with North Texas real estate agents has risen by about 15% this year. But they aren't in the price range most buyers want.  "The inventory is increasing at the upper end — $750,000 and above," Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University said. "If you have a well-located $300,000 house, you can sell it tomorrow. We are seeing evidence of price fatigue in the market."  D-FW home prices are up only about 3% so far in 2019 — nothing like the double-digit percentage home price gains of a couple of years ago.  "The recent spike in mortgage rates did expose how price sensitive the market is," said Paige Shipp, regional director with housing analyst MetroStudy Inc. "Things are not quite as rosy as they seem in terms of what people can afford."  Many home sellers haven't gotten the message, she said. "They want to list their house for more than their neighbors sold for and sell it overnight."  D-FW has an undersupply of homes priced below $250.000.

• Dallas Morning News, October 14, 2019

Moving into a smaller home can be advantageous on many levels depending on your circumstances and reasons why you're choosing to do so. But it's not right for everyone, and depending on your particular situation, it may actually be more of a burden than an advantage. 

Our real estate agents have put together this list of five questions to ask before downsizing.

1. Can I afford to downsize?
   It makes logical sense that moving into a smaller home will be cheaper, whether in monthly mortgage payments or in utilities and upkeep. But doing so can be somewhat misleading, especially if you're in an area where home prices are rising.
   
   If you've lived in your home long enough to stack up some substantial equity, and you can either swap payment for payment or use the proceeds from the sale of your existing home to purchase your new home outright, then downsizing makes sense.
   
   Where downsizing can get you in trouble is when the home you're purchasing costs you far more, or your payments stretch out beyond the timeline you've established.
   
   
2. Will I pay capital gains tax?
   Along the same lines as above, selling a home you purchased two or three decades ago will likely be far more valuable now than it was when you purchased it. As a result, you may be on the hook for the proceeds from selling your existing home.
   
   The IRS allows for exemptions in capital gains of $250,000 for single filers or $500,000 for those married filing jointly. Anything above those thresholds will incur a 15% capital gains tax, plus, depending on what tax bracket you fall under, your taxable income could be far greater.
   
   It's best to consult a financial professional or accountant if you think the sale of your home could incur capital gains tax.
   
   
3. Am I using the space in my current home?
   Downsizing usually comes to mind when homeowners realize they're not using all of the space in their home. Naturally, you want a home that feels comfortable and has adequate space, but a home with cavernous living areas and empty rooms may seem like a little much.
   
   If this sounds like your situation, then it's probably time to downsize. Take into account all of the things you'll be moving and precisely what you want in a future home, then start shopping!
   
   
4. Am I ready to downsize?
   Readiness to downsize is a function mainly of emotion and willingness to start fresh in a smaller dwelling.
   
   Emotions can run high when looking to move out of a home you've made a life in, but rest assured that many more memories will be made in your new home. When it comes to willingness, you'll likely have to part with some furniture, possessions, and generally get ready to live in a smaller space. Coming to that point can take some time, but you'll grow comfortable with the idea of living in, and with, less.
   
   
5. Are my costs mounting?
   Higher utility bills, growing tax rates, and increasing home repairs may be the thing that takes you over the edge when deciding to downsize.
   
   All of these things will factor into your fixed income later in life (if you're looking to retire) and can potentially become a burden if you don't have some financial flexibility and options at your disposal. If your costs are getting to be more than you'd like, then downsizing is right for you.

If you're looking for Dallas homes for sale, then contact us to speak to one of our agents to start shopping for your perfect forever home.