Is it a good time to trade up??

C

classychick

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Were hoping to have our house up on the market soon in order to trade up and move closer to family. We bought in the late 90's so equity in present home good. On speaking to others over the weekend the general consensus was to hold fast until prices rise. Surely when (or should that be if) our house price goes up the rest of Irelands does as well.
 
I have a house on the market that has had 2 viewings in the past 4 months. Houses in the same area are experiencing the same. There seems to be little appetite out there at the moment in my opinion.

Selling your house will be key. The house you plan to buy will have reduced in price in line with your own house. Waiting for your house to go up by say 5% will be alot less than than if the house you want to trade up to goes up 5%. So, It probably is a good time to buy in my opinion but only if you can sell your own house first.
 
This is a very interesting question and I was considering writing something in more detail about it.

Let's say that your house is worth €300k and you want to buy a house for €500k.

If you expect house prices to continue to fall...
If you have the ability to predict house prices and you expect them to fall, then you should sell your house now and not buy until the bottom of the market whenever that is.

If house prices fall a further 20% you will sell your house for €300k and buy your €500k house for €400k at the bottom.

If you think that we are at the bottom and house prices start to rise...
You should buy your new house now before it rises and sell your old house when it suits you.

In practice...
You should sell your house before committing to buying another house. It is still very difficult to sell houses. If you have sold your house and you are a cash buyer you may well be able to get a very good bargain.

There is a risk that you sell your house now and the market suddenly shoots up and your €500k house ends up costing you €550k. This is a small risk. Just be aware of it in case there is an upturn in the market after you sell.
 
I would be very surprised to see house prices suddenly shoot up :)
My opinion is that:
1) Banks seem to be very restricted with what mortgages they will give now. If you're self employed or in the wrong job, it might be impossible.
2) you would need to sell your own house first, as Brendan has said.
3) you would need to be prepared to rent for a period. Only people who have to sell are selling (?) so supply for the house/neighbourhood you're looking for might be limited. Also some sellers may be looking for "2006 prices".

Good luck!
 
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