Nov 13 2008
Selling in a down market
I was asked:
Dear Steven,
I have a home in Cupertino for sale. So far in the past month I've hosted 3 open houses and have attracted qualified buyers. However, each time, the stock market has dropped the following Monday 500 pts or more. Am I bad luck for the market, or is the market bad luck for me? Should I quit having open houses, as it doesn't seem to be lucky for me or the market?Should I continue to drop my listing price to chase this crazy real estate market, or hold tight and wait for this horrendous storm to blow over?
Since you've been in the Cupertino RE market for many decades, I'd like to get your analysis of where you think things are headed and how we should best handle our listing.
So how do you sell in a difficult market? The key is making the home attractive to the buyer, and with a fluctuating economy it comes down to price. As much as I hate to be the bearer of bad news, if you need to sell, price the home under the market. The popular attitude is one of cost savings in this housing recession. Those buyers who wanted to buy two to three years ago but couldn't due to peak prices, now are in a better position with cash down, low interest rates, and more affordable prices. They're out there looking for a "good deal."
If you don't need to sell, staying in your current home for a few more years may be your best option if you need to hold out for more equity. I encourage clients to look at the big picture: If you sell in a down market, you can buy in a down market. A $700K house two years ago may be worth 25% less on the market today. But that is generally true across the board, so the community you want to buy in is also less expensive. Value on paper is one consideration, but your overall cash flow and needs should be weighed.
