If you are considering a move to a more expensive home but have decided to wait until the market picks back up, you may want to reconsider.  I understand the fear of not getting top dollar for your current home but you have to consider both sides of the transaction.  Let’s look at simple example.

Lets say that your current home in 2005 (The height of the Sellers Market) was worth $100,000 but due to the slow down it depreciated 3% the past couple of years.  The home is now worth $97,000.  You decide to wait to move up until you can get top dollar for your current home. 

So let’s say you wait until 2010 to purchase the next home and the market appreciates 5% between 2005 and 2010.  You are able to sell your current home for $105,000 in 2010.  This is an $8,000 increase on the sale of your current home.

Now let’s look at the buying side.  The home you want to purchase was worth $200,000 in 2005.  In 2007 you are able to purchase the home for $194,000($200,000- 3% depreciation).  You wait until 2010 to purchase the home.  The home in 2010 will cost you $210,000($200,000 x 5% Appreciation).  So by waiting to move up you pay $16,000 more on the purchase of your next home.