Is now a good time to trade up, even if I've lost equity in my current home?
Generally, a buyers' market is a great time to trade up, even when your home has lost value. Here's an example to illustrate why:
A family who bought a home for $350,000 in 2005 at the peak of the market, could have seen their home lose 10% of it's value, selling now for $315,000. The home that they want to trade up to may have been priced at $500,000 in 2005, but assuming it's price also decreased 10%, it would now be worth $450,000. So, while this family would lose $35,000 in value on their first home, they would be getting a discount of $50,000 on the new home form what it would have cost 6 years ago, meaning they would be ahead by $15,000 in the end. And, to further improve the situation, interest rates are almost a full percentage point lower than they were in 2005.
Should I rent for a while to see if prices fall further?
Renting can be a great option if you are planning on staying in an area for less than a year or if you are new to an area and want to determine your favorite towns and neighborhoods before making a commitment. However, if you already know where you want to be and think you'll stay put for more than a year, buying is usually a better option. Even though prices aren't expected to make a big recovery, they also aren't expected to fall significantly further, and by buying now rather than waiting, you'll have more years of tax savings and potential appreciation. Another reason to buy instead of rent: Vacancy rates took the steepest decline in the first few months of this year since 1999 (Rising Rents), meaning fewer options, and rents are increasing. Combined with low interest rates and tax savings, homeowners could actually spend less monthly on a comparable property than renters.
Rent vs buy calculator
My House Needs Repairs and/or Updating. Should I sell now or stay where I am?
In this case, it is best to stay as long as you need to in order to make some improvements to the home, if at all possible. Buyers are looking for homes that are attractive, move in ready, and don't need any major repairs. If you must sell without addressing flaws, expect to price your home well below market value to attract a buyer willing to fix it up themselves. Even if there isn't much money available to update the home, if you can spend a few weekends on do it yourself projects, there is a lot to be gained when you do sell. While some things require a professional, homeowners can tackle things like paint, landscaping, and small things that can make a big difference, like changing cabinet hardware and clearing out clutter. (Homes with great curb appeal)
The projects that will provide the biggest return? In my experience, kitchen appliances and countertops, light fixtures, paint, bathroom vanities along with replacing outdated tile, and landscaping are the best updates to make. Of course, if there are any problems with the home's structure or major systems, it is important to find the right professionals to take care of the job.