We’ve been on a lot of listing presentations lately where the motivation to call us in off the bench has been, in so many words:
We’re thinking we should sell our place now before it gets any worse.
The media (and certain local real estate blogs) are certainly good at creating panic, and Realtor blogs are certainly good at glossing over all the doom and gloom, but what’s really going on? If you’re a buyer, are you really feeling the urge to buy for fear of missing that boat again? More importantly for this thread, if you’re a homeowner and been thinking of moving (within the next 2-3 years), are you getting that feeling? You know, that one you all keep telling us? “We’re worried if we don’t sell now, we might have to wait years.”
Be honest, be anonymous, and please share your thoughts in the comments below. (NOTE: To be totally anonymous, when asked to enter email use, “[email protected]”.)
Thanks! We’re very curious to hear what you have to say.
Buy, buy and BUY. Anyone buyers sitting on the fence waiting to buy on the upswing, it’ll be too late by the time you can recognize it. The upswing will already be priced into homes, and you may be having to deal with multiple offers on the house you want. Granted this advice is only for people who see themselves in the house for more than 10 years.
I think it is bad out there, but not as bad as the media is saying. We own our home, and have been in it for 3 years now. Our loan is good, our rate is good, we’re happy where we are. We would like to move if the opprotunity presented itself and we’re not panicked about making a killing on this house, but we don’t feel panicked to move now. we’re happy to have a roof over our head, low payments, a nice house and a great city!
agree with Lev. Buy and buy now! Hold for a while. Don’t play it like a stock. Now is a great time to be a buyer like Alex keeps saying.
Right ignore all the data out there, ignore the stock market. Ignore unemployment just stick your head in the sand and repeat after me. It’s only going up it’s only going up. Buy now or be priced out forever. When has it been a bad time to buy ? Just hold it long enough and it’ll go up, just like that Sun stock in the .com days or Google at 700.
It’s not panic, people are simply realizing how out of touch the median house price has been with median income. When banks start to actually check to make sure people can afford their houses all of a sudden a lot of buyers disappear. But people who have bought in the last few years don’t want to admit they might be losing hundreds of thousands of dollars. So they will just hold on and on and on as prices go down.
Blame the media, blame blogs, heck I’ve seen people blame the baby boomers. People who make huge financial decisions based on emotion and strangers advice should hold onto their houses. After all they will make up the difference on the upswing.
for the record i’m a Realtor. With that said, I have to agree with the buy idea. here’s why. I have clients and we’ve been looking at homes priced at today’s levels. My clients can afford $1.6M and they’re not cash buyers. They are pre-approved and ready and willing to buy. We’re looking at homes priced around $2M and have submitted offers on homes priced higher than that and almost gotten them. We wrote an offer on a house two months ago that was priced at $2.3M. We wrote at $1.6. Offer was not accepted, but the asking price on that home now is 2.195 and dropping. another 100k and we’ll resubmit our offer at 1.5. If we get it at 1.5 that will be sub 2003 price! the sellers are being greedy and they’re going to pay.
I think i know that short sale in Noe alex was talking about and that is another good example. If it’s the home I was thinking of it started around 2.7, then 2.4, then 2.2, and now it’s in contract likely below 2. I’m not sure this works in the 500k houses, but offering 450 on a home asking 500k is certainly not out of the question.
My advice to buyers, look at homes you think you can’t afford and watch to see if the prices come down.
I’ll address this post to people looking at buying/selling a home as a financial decision. Buyers- if you were to buy a home today and sell it in 2 weeks, do you think you will get at least the same price? If your answer is yes, by all means buy! I am a potential buyer, but I am not buying now. Econ 101- If deflation becomes a reality and with collapsed and still collapsing financial markets, it very well could, personal earnings go down = less $$$ to make that mortgage payment. So while there’s still the odd crack smoker that is willing to pony up seven figures for a home, that will be a dying breed in 6 months. Sellers, get real and sell your homes now even if you have to drop the price 10-15%. I’ll be your buyer at a 15% haircut.
anon1- i like your strategy. find the home you like and throw out a 15% discounted price…that’s my approach as well.
My advice, you should buy when rents are at a premium to Mortage/PITI. There should be a premium for rents in this marketplace. You are not risking principal when rent. The problem now is that rents are falling too.
I sold my condo in another city at the end of last year to be able to buy in San Francisco, and even made offers on two properties in the last couple months here.
But then I signed a lease last week.
I’m stepping out of the buyer pool, probably for a few years. The pricing is still unrealistic. I’m not a fool; I have phenomenal credit, good income, and a decent downpayment and yet practically every piece of property in this city is out of my price range. There’s a lot of sellers sitting out there waiting for their price, and it’s not gonna come. The situation is getting worse.
The market will correct or else I’ll just quit this town in a couple years. Either way, buying now is just catching the knife. This is fine if you love the house and plan to be in it for awhile, but I’m not going to take a risk like that on a property I’m not in love with.
I’d say sell, not buy.
there is a risk prices may still fall by a further 20% at least. that willwipe outmost peoples downpayments (=life savings). so why risk? So no, don’t buy now or risk being priced IN forever as prices fall.
“Get While The Gettin’s Good: Sell Now Or Forever Hold Your Peace”:
the title is wrong .. if the post is intended to SELLERS, then its …. “forever hold your pLAce” (ie: the price will drop faster than you can drop your asking or it’ll stalefish).
Anyway. I’d second buying in an aggressive way (anon1).
As for the sellers, it all depends why you want to sell, and where you’re going to move/buy/live. Some great properties are still selling fast, pockets are still burning with millions in cash (just add the value of the 10 most expensive sales in SF of any week for a head spin).
If you property has a serious flaw, sell now with a low asking price that will draw attention and hopefully multiple offers. (flaw = something that makes your property not as nice as a similar one 2 blocks away)
in anycase, you have most people frozen with anxiety and not acting, and some people are jumping in this market a very aggressive way. Pick the right agent (who has b…s and CAN hold the pressure) and make your move if you’re ready to do so!
“Sell now or be priced in forever.”
Seriously, who didn’t see that one coming…
Editor – would love a TIC thread. Is anyone buying them? Saw very few actually “sold” recently
In Sum – We are thinking of selling becuse we need more space. Prices will continue falling, so we won’t get the best price for our next buy, nor will we get the worst price for on our sale.
We are in the market because our family is growing and we are getting tight on space in our condo. We want a SFH in the better parts of Cole, Ashbury , Inner Sunset, Inner Rich. Need to be near the Presidio or GG park for space to jog and ride bikes.
Above all, we feel the market isn’t going to run away from us with quickly escalating prices. A softer consumer, poor employ,emt outlook, down payments blown in the stock market, and tighter credit can assure that.
However, because we need to move to gain space,
we’ll be moving this year. We have to sell our condo for far less than similar units in our building sold for six months ago, but overall, we will like save more $ on our purchase (vs one year ago) than we will lose on our sale with the falling prices, so we consider it an overall win.
We’re not going to try to get cute and sell then rent while we look for a bigger space, but maybe we should.
i’m a buyer with a down payment and good credit looking around the 500,000 mark for a 2 bedroom with garage, not much to choose from but more and more all the time. i’m waiting until this downturn works out more. i don’t believe prices will rise quickly after the bottom is called so i’m not worried about missing lower prices by waiting. i have been looking for a year and a half, so many times i thought a place was a good deal the asking price was lowered or the place would sit and sit then be withdrawn. current example 327 moscow.
@waiting for the bottom,
“withdrawn” doesn’t mean no longer for sale. It is simply withdrawn from MLS. Either contact the seller directly to see if they’d be willing to sell, or have your agent get to work for you on specific properties.
If you are likely to move within the next few years, then from a purely financial standpoint you should definitely sell now. There is a 0% chance that prices are going up in San Francisco any time soon, and there is a very strong likelihood they will continue to drop. You will get more for your home now than you will two years from now. Of course,, there are a lot of other considerations. Moving is a pain. But financially, you would be smart to sell and absolutely crazy to buy in this rapidly depreciating climate. Ignore all the realtors here who ALWAYS say “now is the time to buy.”
Well, I’m putting all my money in the stock market right now.
“Sell now or be priced in forever.”
Seriously, who didn’t see that one coming…
well, actually quite alot of people. that is the root of the problem. people who believed the opposite ‘buy now or be priced out forever”. that myth is now clearly exploding as prices hurtle towards those seen at the start of the millenium.
and Sophie thanks for defining a ‘flaw’ for us – I wasnt sure what that word meant..!
anon I am also taking my chances with various markets around the world. You get much much better interest rates overseas even with the crazy currency fluctuations.
In the long term we are all dead so it doesn’t really matter if your house becomes a good investment in 50 years, no one can say how long is the “long term” that you need to hold a house, is it 5 years, 10, 15, 20 ?? The rent vs. buy arguments have been discussed to death, I’ll just point out that it was a good time to buy a house when the dow was at 10,000 the same was repeated at 8000 and 7000. We’ll see if it’s the same at 6000 which doesn’t seem that crazy anymore.
I’m renting a $2M house for $2K/mo on the peninsula.
I have no intention of buying now.
This thread about “Sell now or forever hold your peace” got derailed into “rationale for buying” instantly, didn’t it? [Go with it Fluj.]
My thought is that in this very strange market it’s probably better to not sell if you do not have a compelling lifestyle reason to do so. The reason I say that is because while we are still seeing properties sell for peak or near-peak levels daily, by and large it’s not the case. Most things seem to be moving for 5 to 10 percent off peak. And that difference can be prohibitive.
However, that said, there’s nothing wrong with testing the waters. If you happen to have one of those properties the market deems fitting, you still have a good chance of emerging with a pleasing outcome.
If you are risk averse and feel confident you’ll need to sell in the next 3-4 years, you should be rushing to sell now. There is a very good chance that prices are higher now than they will be in a long time. And, the costs of carrying your home over an additional 3-4 year period can be substantial.
If you don’t need to sell, or don’t want to, than you shouldn’t. Having a house sit on the market while you still live in it is not a fun experience.
The best analog I can think of to our current market is the period from 1990 to 1994 — and the economy and market fundamentals were stronger then. fluj’s estimate of 10% off is a good one, but so few properties have cleared that there hasn’t been much price discovery. Maybe there will be a Spring bounce but, if I needed to sell, I wouldn’t bet on it.
This decision has more to do with (A) when you bought, and (B) could you reasonably sell without experiencing major issues with buying / moving / taking a loss or have to sell now, and (C) your overall Risk Profile.
If you bought pre-2000 and loads of equity and moving would be a nightmare than it might be worth to take you paper loss and live life. If you’re going to move in 2 years and selling now isn’t that inconvenient — hard to argue with selling now to take what you can off the table and avoid real losses.
If you bought in 2007 it’s a different story.
And of course, if you’re massively underwater you have to consider working with your bank, short selling, or just stop paying your mortgage since you can’t sell at all.
If you are a owner and want to move, just do it. It is a side way move. If the market is high, then you sell high and buy high. If the market is low, you sell low and buy low.
There is zero risk with sideway move. Risk comes in if you sell now and buy later (or buy now and sell later). However, if you are an owner already, want to a different location, it really doesn’t matter what the market condition is.
Fact is though, not everyone who wants to move will now be able to.
Think of someone who put 10-20% down recently, bought, and now wants to move again.
That 10-20% downpayment may well be gone, especially once selling costs are factored in.
But yes, people who bought a long time ago aren’t going to be worried, but the number of people who are concerned is certainly growing., and for alot of these sideways moves isn’t an option as their initial downpayment is wiped out – and not available to use on a new place where 20% downpayment is likely needed.