From Trulia Voices last night …
“I have a home in Laveen on 64th and Baseline. Home is 11 months old and is 1268 sq ft; we paid $192k (2 bed, 1 loft, 2.5 bath, 1 car garage) but have also invested an additional $10k in upgrades since we moved in. Our Zillow estimate is showing as $214k. We want to sell our home and move to Queen Creek, Gilbert, Chandler or Maricopa. The problem is: our home builder is still building in our neighborhood and selling our exact model with many incentives for much less than what we paid just months ago. What are our options? … Is there a way to “trade” homes easily for one of our preferred areas? We want out ASAP.”
There’s a real simple answer to this question:
- Match the builder’s incentives and sell at a loss.
- Stay put.
I’m wondering if something is missing from the explanation. Selling because the values have dropped doesn’t make a great deal of sense, especially when there’s a chance the value of the next home may also fall before it rises given current market conditions.
Patrick Mahoney speculated the 11-month timeframe may suggest financing with an ARM that is due to reset in the extremely near future. That would explain the immediacy.
As to the idea of a trade it’s possible there’s an investor who might be interested, especially when properties in Queen Creek or Maricopa are involved. Not so much for Gilbert or Chandler where values have declined to a far lesser degree than the outlying areas in Pinal County.
The same may go for an owner-occupied property though there would be a lot of details that would need to be worked out. And if the builder’s driving values down there doesn’t seem to be a great deal of incentive for someone to move to an area where they’d be facing the same issues.
Barring extenuating circumstances such as an ARM resetting, the best option likely will be to stay put and ride out the storm. Moving a property such as the one described will be a little tricky in the best of markets (1-car garages aren’t particularly popular) but almost impossible when prices have to match the builder.
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Tags: General Real Estate, Tips for Sellers by Jonathan Dalton
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