The Westfield NJ area — which includes Scotch Plains and Mountainside NJ — is heating up real-estate-wise. Maybe, this will shed some light on the reason the market is finally moving ahead in the Westfield NJ area.
Suppose you bought a 3 bedroom, 2 ½ bath home with a garage 5 years ago in Mountainside NJ for $400,000 and spent $60,000 upgrading it. Now you’re thinking of selling, but with the market decline of the last few years, if you sell now, you’d probably sell at around $400,000 – essentially recouping your purchase price, but not the cost of the upgrades you made.
That means a $60,000 loss on your Mounainside NJ home, right? Not really.
First, if you had not purchased your Mountainside NJ home 5 years ago, but instead rented a home in, say Scotch Plains NJ, like the one you actually purchased in Mountainside NJ, you would have paid about $2500 a month – or $150,000 for the 5 years — assuming no rent increases 
As you can see below, in this scenario, you’ll actually GAIN $55,000!
| Price Paid |
$ 400,000 |
| Upgrades |
60,000 |
| Taxes Paid |
35,000 |
| TOTAL PAID |
$ 495,000 |
| Sale Price |
- 400.000 |
| Net loss |
$ – 95,000 |
| Probable Rent |
$ 150,000 |
| NET GAIN |
+ $55,000 |
Not bad in a “down” market!
PLUS – you’ve gained the income tax refund each year because of the Mountainside NJ taxes and the home mortgage interest you paid … (there are no tax benefits to renting)!
Second, if you’re also purchasing a new home, you’ll save on that purchase because prices have come down. Let’s say, you want to purchase a home you saw on Westfield NJ homes for sale for $800,000. Since the Westfield NJ home sale prices have declined over the past 5 years, the Westfield NJ home you’re now purchasing for $800k would have sold at around $900,000 in 2004.
So, you not only gain on the sale of your Mountainside NJ home, you save on the purchase of your new Westfield NJ home. Sounds like a win-win to me!
Hope this helps you if you’re a seller in the Westfield NJ area who’s struggling with the qustion “To Sell or Not To Sell” in this market …. For more info, contact Teri at www.Westfield-Area-Homes.com.