Let’s say that your end goal was to sell your primary house when the equity increases by $250,000. You understand the principle residence exemption of capital gains taxes on the first $250,000 if you are single and $500,000 if married. You would know the optimum time to sell by keeping track of your real estate net worth.
Similarly, if your equity has been on a downward trend, you would know that it’s a buyer’s market and the time is right to buy additional properties.
The real estate market doesn’t transition from a seller’s market to a buyer’s market over night. You can get prepared to sell or buy sooner by keeping close tabs on the worth of your properties.