Coastside’s Move-Up Market – Healthier than you think?
One of the primary reasons for selling a current residence and purchasing another home is the need for more space. This type of buyer in the industry is called a “move up” buyer because they are typically “moving up” in property value. There are several reasons for this lifestyle change. If you’re thinking of downsizing, that’s a different scenario.
Top 5 reasons Coastside Move-up Buyers are in the market:
1. More interior square footage. Growing families may want one or more additional bedrooms, and a separate family room.
2. Increased Privacy. Privacy can mean being next to open space, or simply not having the neighbors be able to look into your windows – it depends on what’s important.
3. Aging needs. Typically this means increased mobility features, improved layout and access, and space for visiting seniors such as an in-law wing or ground level bedroom and bathroom.
4. Different neighborhood. On the coast, some of the scenarios I hear about are – move closer to or farther away from downtown Half Moon Bay, move to the west side from the east side of Highway 1 to be closer to the water, or move to an ocean view home.
5. Updated kitchen. It’s time to get the kitchen you’ve always wanted and you don’t want to over-invest in your current residence due to neighborhood comparables.
According to the National Association of Realtors, think about the following questions before making your move-up. If you answer yes to most of them, it may be a good time for you. (Consult your professionals to fully understand if this is a smart move.)
Is there enough equity in your current home?
Has income or financial situation improved?
Have you outgrown your neighborhood?
Are there reasons why you can’t remodel or add on?
Are you comfortable moving in the current housing market? – (will there be an income tax increase for 2011?)
Are interest rates attractive?
Are Move-up Buyers in the market right now on the Coastside?
Yes, we just have more in the entry level $500K-$600K range right now. Thus, this side note to local sellers: If you bought in the down markets of the 80’s or early 90’s, and have some equity, you’re in an advantageous position. There are about the same number of sales this year compared to last year in the typical “move-up” price range on the Coastside – $700K to $1 million sales price range between Jan 1 and Aug 30: 37 sales in 2009; 40 sales in 2010.
On the surface it may appear that there are fewer move-up buyers this year compared to last year if we only look at sales in this price range as a percentage of total sales (45% of total sales in this time period in 2009; 37% in 2010). These numbers may be skewed by the fact that there could have been more first time home buyers in the market as a result of the federal tax credit that expired on April 30, 2010, favorable interest rates, or even just because buyers are feeling the coast is now more affordable. The average price per square foot of these sales during this time period in 2009 was $357.97; the same for 2010 was $338.93. These seem to be positive indicators for our local move-up market.
Related Article: Housing Isn’t Really Dead