Life on Your Own Terms
The reasons to purchase a home in our market are as compelling as the most value-obsessed buyers could hope for. Prices across the board have fallen dramatically from their artificially-induced highs of five years ago; while the cost of financing a home has seldom been lower. Federal tax incentives—now expired—were another good reason to buy; but their one-time benefit has long since been eclipsed by historically low interest rates that save you money over the entire 30-year life of the loan. Long after tax incentives are forgotten, buyers will still be raving about mortgage interest rates—obtained in the year 2010—that are still saving them big bucks each month in the year 2035.
Meanwhile, the reasons for selling a home in today’s market can be just as compelling, if not quite as obvious. As Southwest Florida’s residential property market moves closer to some semblance of balance—with buyers driving sales up and inventories down to their lowest levels since October, 2005—we took note of what national real estate expert, Steve Harney, had to say recently about there being very good reasons to sell your home in today’s market.
Harney, of course, isn’t oblivious to the fact that recovering markets like ours still favor buyers over sellers; and that many sellers are forced to sell because of tough economic times and the burden of mortgages they can no longer afford. But he clearly doesn’t believe that the other 80% of homeowners—sitting atop positive equity in their homes—should deny themselves the opportunity to sell just because they won’t net the same level of proceeds their neighbors fetched during the boom. There’s both a practical need and a strong emotional component involved in the decision to sell a home; and Harney believes these needs shouldn’t automatically take a back seat to the absolute bottom line of a real estate transaction.
“By not accepting a little less than you’d hoped for, are you not also sacrificing something of potentially greater value?” Harney asks before posing the larger lifestyle question: “What made you originally decide to move?”
Indeed, think back to why you first started thinking about selling. Was it to be closer to a new job; or to loved ones? To start a new family; or downsize from an empty nest? For retirement or health reasons? Perhaps a new life in a gentler climate?
“Whatever the reason,” Harney says, “You mustn’t allow your house to trap you into not getting on with your life. Today’s market may not allow you to get the price you once hoped for. But don’t allow it to also prevent you from getting the life you’d hoped for.”
Many homeowners would counter this by saying that they aren’t putting their lives on hold so much as postponing them a bit—perhaps by a year or two—until the market improves and a sale nets more proceeds. Although the market is certainly moving ever-so-slowly in that direction, most evidence points to no resumption in home appreciation before the end of 2012, at the earliest. Even then, appreciation will be minimal and thus hardly worth the years you gave up waiting for something more substantial to happen.
Robert Shiller, founder of the S&P Case Shiller Report, surveys 109 economists, real estate experts, investment and market strategists each month for his MacroMarkets Home Price Expectations Survey. Following the July survey, Shiller reported: “For the second consecutive month, the consensus indicates diminished confidence in the prospects for a near-term recovery. This month, 60% of the panelists projected negative home price growth for 2010.” That’s up from 40% just two months ago.
Another good reason to consider selling now—as opposed to 2012—is that recent sales and pending sales indicate there are plenty of determined buyers combing the market for the best-priced buying opportunities RIGHT NOW.
It’s more than a little ironic that many buyers who might otherwise have waited are acting now on the tacit acknowledgement that the market won’t get any better than this. Meanwhile sellers hoping the market will get better than this are ignoring one of the biggest buying sprees in Southwest Florida in recent memory. Will this level of activity be around two years from now when modest appreciation resumes and you’re ready to sell? Impossible to say; but certainly not worth risking in exchange for minimal appreciation and two years shaved off your life.
Harney provides tremendous food for thought to sellers with appetites for change. It makes practically no sense to wait for whatever market lies ahead when you can sell your home today, get a similarly superb deal as a buyer on another property; then get on with living life on your own terms.
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