For those of you who missed the article in Time by Daniel Kadlec, 78 million Baby Boomers are in or entering their empty-nest years. There is a weakening housing market, although not here in Summit County, so you are working with less equity than last year- but it could be more than you might have next year. If you sell your $600K home and buy a $300K condo and housing prices drop 10% over the next year, you will loose $30K but if you hang onto the house you'd loose $60K. Home prices are rarely this simple and move unevenly. In many markets large homes are holding up better than small ones- maybe a reason to delay but not to long. There is a advice that says you should sell before the end decline of the market. Price movements vary from region to region. Leave a home in Florida, Arizona or Nevada and you leave what has been ground zero for real estate speculation for the past five years. Prices of those properties, condos especially, may drop faster than the national average in the coming year (Data from Zoltan Pozar at Moody's Economy.com). If you move to a place that missed the big run-up in prices, like the Mid-west that saw a 35% rise in home prices since 2000, you may miss the big slump as well. Other regions that saw 90% increase like the West, 80% in the Northeast or 70% in the South, are in for a bigger dive. This is a dive ten years in the making and there is a glut of unsold homes on the market (not in Summit County, here we are experiencing a "for sale" shortage). At the current rate of sales, it would take 7.3 months to sell all the houses now on the market. In January of 2005 it would have taken 3.7 months to do the same thing. The number of unsold homes is today more than 50% higher than the average in 2002-05. New homes are selling at a slower pace and buyers are walking away from signed deals (and their deposits) at twice the rate of last year. The good side- interest rates, though up, are still at near 40-year lows. The economy is growing and NAR- the National Association of Realtors has predicted a rebound in home prices next year. Here's another case where economists disagree- shocking. The real question is, "are you ready to downsize?" It may not be as easy as it sounds to sell the home where you helped your children grow up. But Phil Storm, an financial planner from Denver argues that living in a house that's to big ties up capital and imposes unnecessary taxes and upkeep costs; he advises you sell as soon as those bedrooms are empty and that such a decision should have little to do with the up or down market. Good luck figuring it out for yourself! Blog by Jason Brewer | 
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