Today's vlog comes with some text to help illustrate the concept I am discussing.

In a downward market you will often buy in the market you sell in. The same influence on your selling price exists for other sellers whom you may buy your next home from. If your property was recently valued at $400 000 and you choose a property recently valued at $600 000. You will find the sellers of higher priced properties will need to accept greater reductions as the market continues to decline. The higher the price of a home, the fewer buyers who will be able to purchase the home. This results in lower demand and the lower the demand the lower the value.

The following may illustrate the above statements, I have chosen the numbers for simplicity and in no way relate to any specific property or market.

Your property was worth $400 000 however the market has reduced by 5% and is now worth $380 000. You sell for $20 000 less than desired.

You choose a property that was worth $600 000 however the market has reduced by 5% and is now worth $570 000. You buy for $30 000 less than the seller desired.

You accepted $20 000 less for your property yet saved $30 000 on the home you purchased resulting in a positive net result of $10 000.  

Recalculated based on the higher the price the lower the demand concept would look like this. These numbers again are simply for illustration and not an actual indication of real market values.

Your property was worth $400 000 however the market for similar homes has reduced by 4% and is now worth $384 000. You sell for $16000 less than desired.

You choose a property that was worth $600 000 however the market for similar homes has reduced by 6% and is now worth $564 000. You buy for $36 000 less than the seller desired.

You accepted $16 000 less for your property yet saved $36 000 on the home you purchased resulting in a positive net result of $20 000.