One of the most challenging and interesting questions posed by consumers is, "When is the best time to sell our big house? We’ll be retiring in the next few years and want to make sure we maximize our equity in order to purchase a smaller second home and have money left over".

This question is intriguing since consumers are: 1) more savvy than ever about maximizing their equity; and 2) equally savvy about market trends and timing their sale to hit the peak of the market for their big house.

Let’s first cover market trends and the impact they can have on timing a sale. Lots of factors impact a property’s salability including supply and demand, the economy, and demographics. For baby boomers wanting to unload their 4,000+ square foot house, all three components may become problematic in the next few years.

Here’s why.

The generations poised to purchase move-up homes in the next decade are typically more conservative than their parents. Many of these twenty and thirty-somethings pride themselves on not entrenching themselves in massive debt (like their parents did). Instead, they purchase modest common-sense houses without a lot of fluff and conversely build up their 401(k)s and savings with the mortgage payments they save (totally polar to their mortgage-laden parents).

The bottom line is that it’s doubtful that baby boomers will be able to as effortlessly unload these large homes on the generations that follow compared to how they initially embraced purchasing these large homes. Or to do so may require a price softening and/or incentives to attract these buyers to the plethora of homes available. While the supply may be abundant, the demand may be miniscule.

The next factor to impede the sale of large homes is the economy. Predicted to soften into a slump or possible recession by 2,007, rising interest rates will mean fewer buyers and a generally tougher time for all sellers. Home affordability will continue to be under pressure due to rising purchase prices. Couple with this inflation-sensitive increases in utility costs that drive up monthly bills for heating and cooling and the large home may slip from the affordability category for many potential buyers.

In order for most consumers to maximize their equity when selling their large home, timing the sale on the high-side of the market is critical. In Part II of this article to follow on Monday, November 6th, we’ll provide three market indicators the seller can watch to replace some of the guess work with analysis and maximum results. ( Click Here For Part II

Published: November 3, 2000

Use of this article without permission is a violation of federal copyright laws.

Julie Garton-Good, DREI “The Frugal HomeOwner™” As a syndicated newspaper columnist, author and international speaker, Julie Garton-Good DREI, C-CREC™, is called “America’s Home Affordability Expert”, addressing more than 25,000 persons annually on topics of real estate industry trends and home affordability. She is the author of five real estate books and is the sole two-time recipient of the international "Real Estate Educator of the Year" award from the Real Estate Educators Association. In 1997, The National Association of Realtors® nominated Julie as one of the fifty most influential people in the real estate industry. She shared the list with only three other women.