The recession and the weak real estate market are making it somewhat more difficult for young and growing families to "trade up" to a larger house. This is especially true for families with mortgages on homes which have lost value. They may be particularly stuck in a quagmire. Young families need to be particularly cautious because financial missteps which could have significant effects on their long-term prosperity.
Families who have bought a starter home and would normally have been looking for something larger have had the normal real estate market cycle disrupted by the economy’s condition.
As the economy turns around and the real estate market stabilizes a lot of families will be making a move to accommodate their growing size. There is definitely a lot of pent-up demand from growing families who have been unable to buy a larger home.
Falling housing prices and persistently low interest rates, along with the new government home buyer tax credits have created an enticing market.
Here are some options for those in increasingly cramped quarters: Families can rent larger homes from home sellers whose properties have been on the real estate market for an exceedingly long time.
A family wanting more space but unable to sell their home, because of the real estate market, can decide to rent their own smaller property and turn it into an investment property. They can then purchase a larger home for their growing family.
For families who are likely to face job relocation in several years it may not make sense to buy due to significant one-time costs.
For others it will be still riding out the economic storm in their snug but comfy home.
