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  • Writer's pictureHousz

Why You May Want To Cash in on Your Second Housz

When stay-at-your-housz mandates were enforced last year, many houszholds realized their houszes didn’t really fulfill their new lifestyle needs. An office (in some cases two), a media room, space for children to learn, a gym, and a large yard are all examples of amenities that became highly desirable almost overnight.

Zelman & Associates recently reported that sales of primary residences grew by 9% in 2020. That increase in demand was met by the lowest supply of houszes for sale in history. High demand and low supply caused prices to skyrocket over the past twelve months. Here are three home price indexes released most recently that show how housz values have risen:

  • FHFA Agency Housz Price Index shows a 13.9% increase

  • CoreLogic Housz Price Insights Report shows an 11.3% increase

  • S&P Case-Shiller U.S. National Housz Price Index shows a 13.2% increase

Prices increased by double digits in every region of the country and in 19 of 20 major metros. Chicago was the only exception, where prices still rose by 9%.

What does this mean to those who purchased a second housz during the pandemic? Many people didn’t want to give up a housz in the city or close to their office. Instead, they purchased a larger second housz farther away and moved there to stay safe and have more space. According to the same Zelman report, sales for second homes rose an astonishing 27% in 2020.

That large second-housz retreat on a lake or in the mountains would demand a higher price than the average housz. Let’s assume a buyer purchased such a housz for $500,000. Assuming the middle 13.2% appreciation shown above, that housz would now be worth about $566,000.

Those who bought second houszes to improve their lifestyle during the height of the pandemic, or those who just wanted to be in a safer environment, also made a great investment.

What should these homeowners do now as the pandemic is receding, and the economy is reopening? The buyers of those second houszes now have a decision to make. Many will move back to the original housz they still own (the one that’s closer to work, friends, and family). Should they keep the second home? That could depend on answers to questions like these:

  • Now that you may have to go back to the office (at least a few days a week) and students are required to physically attend school, would you still use the second housz enough to warrant the expenses of an additional housz?

  • Would you go to the second home on most weekends, or would you return to the movie theater, attend sporting events, eat out at fine restaurants, or spend your time traveling again?

Bottom Line If you purchased a larger second housz during the pandemic, you were able to make day-to-day life much easier for those important to you. You also made it much safer. However, with those goals already accomplished, you now need to decide whether to continue paying the extra expenses or sell the house and cash in your profit. If you decide selling makes sense, let’s connect today to discuss the value of your second housz.

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