When To Sell The Empty Nest

How to calculate the risks of downsizing in an uncertain housing market

If you're an empty nester looking to downsize, don't let the weak housing market stop you. You may be working with less equity today than you had a year ago--but it could be more than you will have a year from now. And swapping your McMansion for something smaller today leaves you less exposed in a falling market.

Say you sell your big home for $600,000 and immediately buy a condo for $300,000, and housing prices drop 10% over the next 12 months, as some economists forecast. In the condo, you would lose just $30,000 on paper; in the house, you...

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