Chitownproperty

With markets across the country cooling down to more sensible levels, some people are sitting out of the real estate game, convinced that prices will go down even further. These “bubble sitters” are waiting for just the right moment to swoop in to pick up a great deal, cashing out of the market now by selling their home and renting, or waiting longer to buy their first home. But is this a smart strategy? It depends on your motivation.

Economists say that speculating by selling your home in hopes of buyer cheaper in the future doesn’t make a lot of sense. Between selling costs, the lost tax advantages by going back to renting, and purchasing costs of a new home later, you will probably cancel out any gains made from market fluctuations. If you have no other reason to move, it’s best to stay put. But if you need to downsize, or only plan on living there for a short amount of time (less than five years), it might make sense to rent while waiting to cherry pick the best deals. And if you are considering entering the market for the first time, you could benefit by renting just a little longer.

Of course, it’s hard to predict the precise bottom of any market swing. If you’re planning to stay in the new home for a long time (over five years, for instance), you should still look to buy as soon as you can to take advantage of all the traditional benefits of owning real estate. If you understand your local market and research carefully with the help of an experienced agent and appraiser, you won’t overpay.