Seller beware! If you are a homeowner and you do not want to stay in your house for another 2 to 5 years or more, now would be a good time to consider reviewing your goals and plans. The economic climate is shifting and things are happening that may affect those plans and goals. In this blog I will go over the ebbs and flows of the bell curve of Real Estate and illustrate a simple supply and demand model that will allow you to visualize it in timeline form, because time is what matters most in this equation. I offer a free comprehensive analysis and a plan for any homeowners who are concerned that when the time comes to sell, that the market will not hold up the value or reveal a sufficient buyer to achieve your Real Estate goals.
What this blog and the political graph will reveal, is how to understand the market forecast and how to make that information work for you. It has been said that it is not easy, or (some would say) it is not possible to time or predict the market. For the most part, that is true, but just because we know how clouds work doesn’t mean we can make it rain, but it does mean we can be a little more right about when a storm is coming than not, and sometimes an accurate warning is all we need. That is what I am offering here, some clarity on the over-all process, but also allowing time and space to adapt, adjust, and change things up so that you can make the most of the largest asset you may ever own and simultaneously position yourself to thrive during future hard economic times.
You see, before Covid-19 most people would ask, should I sell my home, can I sell it, and will I get every penny for it? The funny thing is now after Covid-19 is everywhere people are still asking the same questions, i.e.… Should I sell my home? Can I sell it? And will I get every penny for it? What homeowners really should be asking is, when should I sell? That is the million-dollar question now. If you, your neighbor, your friends, or any of your colleges are planning on selling their Real property in the next 2 to 5 years, now would be a great time to review those goals with them and see if we need to adjust the timeline to find the perfect time to get every penny for your house as a home-owner and achieve the goals going into the next phase of your life.
Historically speaking, during an election year and the subsequent next couple years to follow, interest rates the feds give for the US dollar tend to dip down before the election and go up shortly after. The graph in this blog also shows the down up flow almost right before and right after every election for the past 50+ years. I am not trying to say there is something shady about the timing, but rather just inform you so you are aware of the cyclical nature our economy has especially as it relates to Real Estate. This is more or less safe practice of stability and recovery which is predictable because it works and it’s happened before. What that means for you as a US citizen and more importantly a homeowner is to be aware that our next presidential election is right around the corner. Many of us have taken for granted the running low interest rates, but if you are planning to buy again in the next 2 to 5 years and you will be using some or all of the proceeds to buy your new home, you may want to talk about that now with me or your go-to Real Estate professional in the field that you are comfortable with.
We are in what is called a duel market and it is a product of a lag shift that is created because the price point most current sellers feel their home is worth, is different than the perceived value that buyers expect to get for their money currently. That difference in perspective is called “the gap” and in the gap is where time slows down in Real Estate until is stops and changes direction. A duel market is not a bad thing though, in fact it means you have options. A duel market says you can sell a single-family home in a popular price point at top dollar even today still, and it will also most likely appraise without any influence.
What is also means is, if you plan on downsizing to something smaller and more abundant in inventory, like a water-front condo to keep as your low maintenance forever home, then you as the buyer have the leverage to get a better deal (relatively speaking) on your new property than your buyer will get for yours. If you just got a raise, you moved, or have a blended family making it a good idea to buy up to something much larger than the home you need to sell, then after you get top dollar for that home, you will get a substantially better deal on the larger home with additional tax benefits to help your dollar go a lot further and restart the equity train for your future.
Caveat Emptor (Buyer Beware), as there are some good deals out there, but most of them are not, and many are listed on public auction websites. These sites often are seen by so many people that the fear of missing out on an opportunity tends to create an auction effect against all the other potential buyers. The FOMO effect (fear of missing out) takes over and the bidders end of driving the price too high and the highest bidder gets buyer’s remorse. In most cases that buyer now understands the margins he or she first saw have been absorbed by the FOMO effect and they many times rescind the offer and the property gets put back on the chopping block for the next sucker.
There are a lot of Real Estate professionals still hunting for their next paycheck and with less inventory on the market, those hungry agents are hitting the phones calling unsuspecting home owners promising them the world more than ever. You may have had a few of them call you, and if you have ever tried to sell your house yourself, you definitely know what I am talking about. Seller beware, the best agents don’t call strangers, they already know people and Real Estate, and that is what makes them great, and that is how I have gotten to this level in my career. New agents can’t possibly have a plan to navigate you during the sale process and especially a marketing plan to insure you as the home-owner gets every penny for your property, and agents that have been doing it a while certainly can’t assume that the old dog knows all the new tricks. Experience without a process and results is much like fashion in the Real Estate Industry, meaning just because it worked then, doesn’t mean it will have the same effect now.
You see bell bottoms once gave you a healthy amount of status and clout with peers or even the opposite sex, but if you wore them in the same manner today, you may get a few eyebrows raised. All kidding aside, no house is ever the same, no homeowner is ever like another, no financial situation or condition is ever the same either, and no market in the future ever has the same solutions to a homeowners’ problems, of which are also most likely very unique. Therefore, a unique and custom approach is most effective to sellers in todays market. The right agent knows all the interrogatives regarding the when, where, how, why, what, and who to ask. This is the first step to guiding the home-owner through the storm at the best time to achieve the most desired outcome.
Understanding the future of Real Estate is understanding sellers and how the system works. When you know Real Estate, and the details of the clients needs, the last step is to plug it all in to a model that is wrapped around a macro idea brining clarity of the best practices for pricing the home right, preparing the home at the property for sale, and promoting the property in front of the most ideal buyer for that specific property to home-owners. With the 2020 Presidential election rapidly approaching we poised to see another interest rate hike. Right now, low interest rates are what is keeping the buying pool flowing and how the inventory is staying low which is propping up home values. All it takes a subtle shift in inventory with a small number of big corporations with big Real Estate holdings to release their properties onto the open market along with an interest rate hike to all but slam the breaks on home sales, and worse, home values.
That means as a seller, you stand to be competing in a huge ocean of home options for buyers, but simultaneously be starring at far less buyers because of the higher interest rates. Also, if the local service industries, stay out of business or suffer through much less business due to Covid-19, the market will turn liquid pretty fast. That means less bank loans and motivated buyers and most cash buyers looking for the best deal. That is when you as a homeowner could be starring down the barrel of a full-blown buyers’ market. In this economy, a buyers’ market could last 90 days to a few years. So, like I said in the beginning, if you or anyone you know does not want to live where they are living now in the next 2 to 5 years or longer, I would like to talk to you today! Thanks for time! I hope it helped. 😉