Reported in the Wall Street Journal, a trend seems to be emerging whereby some intrepid homeowners are intentionally taking a loss on their current house—and writing a big check to retire their old mortgage—in order to buy twice the home for not much more money. Others, eschewing conventional personal-finance advice, are even opting for “cash-in” refinancings, paying thousands of dollars out of pocket to settle old loans—and then taking out new mortgages with lower payments, shorter durations or both. This trend may not be as accutely noticeable in the Manhattan luxury market, but in a market where pricing is down, there really is not better time for upgrading. Selling a $ 1million apartment for a 15% loss will net roughly $ 850,000.00, or a $ 150,000.00 loss. If you are cashing out, thats a simple loss. If you are buying an apartment that would have sold for $ 3 million when you bought your $ 1 million apartment, if the $ 3million apartment is down 15% in value too, that would mean you could buy it for about $ 2,55million, or a savings of $ 450,000.00……making your net gain about $ 300,000.00. Now throw in lower mortgage rates and the upside becomes even more appealing.

LUXURYlesson: In real estate, focus on ‘balance-sheet-thinking’ rather than ‘single-transaction-thinking’.