With the economic challenges and many retirees returning to work most folks are not in the market for a luxury home. However if retirement has treated you very well you may be in the market for a home upgrade to a luxury home, and there has probably never been a better time in US history than right now to find some remarkable bargains on luxury residential properties.
Fortune Magazine profiles several great homes in several states.
Of course a key challenge in a market where housing is "cheap" is that it's generally much harder to sell your own house. However for those who are upgrading to a more expensive home the relative advantages of buying now may outweigh disadvantages of the down economy as long as you are certain you can sustain the higher payments and costs that are generally a part of owning a luxury home.
In terms of "savings" the advantages can be significant.
For example let's look at the relative cost savings of upgrading in a down market:
You sell your home that was formerly worth $500,000 for only $400,000. Your paper "loss" is $100,000
However assuming the same percentage loss of 20% you are likely to find a luxury home that formerly would have cost $1,000,000 for only $800,000 - a cost "savings" of a whopping $200,000 over the cost of that home just a few years ago.
In this case you have saved a net $100,000 over the cost of the upgrade if you'd sold and bought the *same two homes* when prices were higher.
Of course the down side of this situation can happen to those who are downsizing. If the home you buy is *cheaper* than the one you have sold your relative costs to make the switch are higher. To see how simply reverse roles in the above example and become the seller of that million dollar luxury place.
Many experts expect home prices to stabilize in 1-2 years but in the meantime there are sure to be some amazing bargains for those able to take advantage of them. Here at RetireUSA we are hoping you are in that lucky group!