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To sell or not to sell???
This is the single most asked question I’ve received in the last month. So given that everyone wants my thoughts, here they are.
I’m going to break this down with statistics and analytics, but first, let's have a discussion about life and real estate. Real estate is a financial tool to build wealth, but it’s also your home. It’s where you come at the end of a stressful workday, it’s where to go when your personal relationships are going beautifully and also crumbling around you. It’s where some of you work, and play, and cook and grow plant babies. It’s also where some of you raise your human babies.
Timing to sell real estate has to do with markets; yes, but you’re never going to be able to time things perfectly. That’s like magically knowing to buy Facebook stock in 2007. Who would have known!?! Also, in your attempts to time the market, what are you giving up? Is your kitchen to small but you’re “waiting to sell”? Are you finding that you’re uninspired to cook? Congratulations it’s a wash. You’re “timing the market” to make some arbitrary profit you want, but in the meantime, you’re spending money to eat out every meal.
I can give a million other examples like this.
With that, let’s have this “to sell or not to sell” discussion with the assumption that you’re making decisions from a rational perspective. That means, you need a new kitchen but are asking me should you sell in Feb or July, because you understand that not upgrading is also costing you money, not preparing you for some giant magical win.
Here are two graphs that help to explain the market we’re in.
There are less people shopping this year than last year. This is pretty obvious. Interest rates have priced some people out of the market. A lot of people bought properties in the last few years and have no interest leaving those happy homes. Others believe the entire US and world financial markets will crash and they will be the few smarty pants that predicted this and cashed in. ¯\_(ツ)_/¯
I’ve read statistics stating about 36% less buyers in the marketplace, to be specific. But you know who is in the marketplace? Real, serious buyers. Because of these real serious buyers, the month over month pending sales numbers have increased, and they will continue to do so, if you ask me. We have proof sales are happening.
One last condition to discuss is the inventory. Chicago is a compilation of very localized markets. This means the conditions in South Loop are different than Avondale and Wicker Park is a drastically different story than Humboldt Park. Many neighborhoods have a shortage of inventory. (Why is a discussion for another day.)
Let’s recap:
1) we have buyers shopping
2) deals are being made
3) there is a shortage of supply
Economics tells me if the last 3 conditions are true, prices will continue to rise until something changes.
To buy or not to buy?? To sell or to hold??
Ultimately, this comes back to the first topic we discussed. Is the anger of your kitchen forcing you to change how you spend money, eating out? Well then, it’s time to sell + buy. Buyers will buy your small kitchen because you have 3 bedrooms, and they currently have 1. You will buy a big, beautiful kitchen because you deserve one.
Does your home make you happy? Then don’t sell until it no longer makes you happy.
99.9999% of us will not win while trying to predict when the next teenager invents a website that is going to change our entire planet. Let’s play with odds in our favor please.