Nobody’s happy these days.
As the residential market begins to tip in favor of buyers for the first time in more than a decade, everyone involved – buyers, sellers, and their realtors alike – is unsettled and unhappy.
Inventory is up, days on the market are up, price inflation has slowed to a crawl and in some cases is even declining. Reductions on listing prices have become the norm. That sellers are unhappy is pretty understandable.
But buyers are cranky as well. Many still pine for the days of 3% interest. And because of ongoing inflation, there is talk of the Fed bumping the rate this fall – which will eventually affect mortgage rates. In what should clearly be a wonderful time to buy a house, some are still actually waiting for rates to drop. Spoiler alert: they won’t.
Realtors are trying to span this chasm between clients’ desires and market realities, and get the deals done. That can be challenging.
So, what do we do with all this? We can start by accepting some hard truths:
If you want to do a deal, now is always the best time. Residential real estate is an investment, but it is much more about where and how you live your life than it is about money. If you need to buy or sell right now, why limit your life in other ways by waiting for market improvements that may or may not come.
Trying to game the market almost never works. Waiting for rates or prices to drop is at best a crap shoot. You might get lucky – rates could go down, and/or inventory could go up – but you might not. If you need or want to buy or sell, why wait on the sidelines and deny yourself the benefits of doing a deal on the chance you’ll get a better deal at some undefined point in the future?
There is absolutely no guarantee that you will sell your house for more than you paid for it. Despite short-term ups and downs, property values have steadily increased over time, and playing the long game – holding onto a property for decades – usually results in financial gain. But you may not have decades to hold on. Maybe you need a bigger house, or a house in a new city or state – right now. The current market may deny you a profit.
Moaning about realities you can’t change doesn’t help. I have clients who will be listing their house next week at $5,000 less than they paid for it four years ago. I just closed a seller at $9,000 less than he paid for his house – also four years ago, at the end of the biggest year-on-year price escalation in recent memory. Disappointing, of course! But they are aware that the market rules and that they had a good run living and working in their houses. Eyes clear, chin up, do the deal, and move on to the next chapter without dwelling on the loss.