The Burleys owe about $30,000 more on the downtown home’s mortgage than the home is currently worth. That made selling it a problem.
“I knew that it was going to be a challenge because the market in the city has really dipped, and I bought in the height of the market in 2006,” Shelly Burley said. “It really wasn’t worth it to take that $30,000 hit, when we could get someone to rent the property, have them pay down the mortgage and get to a place where we could either get out for the same price or eventually maybe make a profit off of it, if we rent long enough.”
There are no hard numbers as to how many buyers are holding on to their previous properties, but there is plenty of anecdotal evidence, especially as rental demand and rent rates continue to surge.
Of course not everyone has the financial wherewithal to buy a home while owning another, but a growing number do, according to Richardson.
“The person who didn’t buy during the rise and fall of the housing market, the person who has been in their home for a while, who is able to refinance into a record low rate, and so because of that very low re-financing, they have built home equity up over the past five years, the person who may be advanced in their career. They can take that next step without pulling (equity) from their former home,” she said.
The Burleys were able to put 20 percent down on their second home, even without equity from their first.
“We just cut out all the non-essentials, and we were able to stockpile the payment quicker, so we could move out and move to this lovely home,” said Keon, who enjoys throwing parties by their new pool.
Finding a renter for the old home was even easier.