Google shows almost 14 Billion* results for the following search “Is it a good time to buy a house 2013”
Google shows only 2.6 Billion* results for the following search “Is it a good time to SELL a house 2013”
Really?
Is it 6x better to buy than sell? Doubtful.
Is there 6x the selection available? Hardly.
Is the interest rate 6x lower than it used to be? Not really…we were around 6.5 to 7 before the market went ‘boom’ in 2008.
[ For a list of the markets that are most undersupplied, click here, here, here, here, here and here ]
Why are there 6 times more articles about buying than selling?
I think it can be framed in this manner – it is far harder to sell than it is to buy and the messages that you have to deliver to the sellers are far harder than the ones you have to deliver to the buyers so agents continue to offer advice to the buyers of the world…it is just easier.
Here is what the sellers are up against:
- Sellers, in many cases, are still fighting the collective leverage (mortgage debt) placed against properties as late at 2007
- Sellers, in many cases, are reluctant to lock in losses (human nature)
- Sellers, in many cases, are left with no down payment after payment of commissions and other expenses
- Sellers, in many cases, are the ones who bear appraisal risk (and this is a significant issue)
- Sellers, in many cases, are the ones who bear the timing (OMG! Where am I going to go if I sell quickly???)
These are all legitimate and powerful concerns but they can be navigated.
To the sellers of the world, I offer the following advice – you are not in the position that CNN and Yahoo tell you that you are or that agents want you to believe.
- The fact that Realtors are screaming 6 times as much about buying than they are about selling is driving people to your door step
- The fact that inventory in the good markets has declined by 60-70% in many cases means you have far more leverage than you think you do
- The fact that the last 4 deals I have personally been involved in have resulted in multiple offers means you have options
The same factors that drove the market to dizzying heights and unfathomable lows within a 36 months has largely played out and the market is within 5-7% of its pre-bubble trend line. Our path from 1990 to 2003 with minor adjustments for economic factors puts us on a value path that is not too far from where we are now.
What does that mean? We are in a normal market.
Here are the basic scenarios:
- If you are a seller of a quality property in an undersupplied mature neighborhood, you are fine. Price with ‘reasonable aggression’ but be mindful of comparable sales if you are likely to be purchased by a debt buyer. Use the higher comps in your market and/or the PENDING properties as the best pricing guide.
- If you are a seller of a quality property in a balanced neighborhood, then spend some time on the absorption rate (ask your real estate professional with help on this) to get a feel for timing. Balanced markets with good school districts will largely follow statistical trends in terms of Days on Market and Ask/Sold price ratios. Comparable sales are important in your analysis. Use comparable SALES as the guide.
- If you are a seller of a challenged property or in an oversupplied market, it could take a while. Be very conservative in your pricing and price near the comparable lows in your market.
If you are thinking about selling but are unsure, then seek competent advice.
Obviously, we would be happy to help…
(* the numbers of searches that match the terms may bounce around a bit for a variety of factors)
