The photo you saw was from the house I sold at the top of the hill in La Jolla. Above is about half of the ocean view – here is more of it below. The sunsets will be outrageous next summer:
Full video tour here – hat tip Sam!
So you’ve heard that the market has slowed a bit, and you’re wondering,
“Should I sell now, or wait it out?”
If you don’t mind keeping your home forever, then fine, the value will probably go up in the long run. But if you’d rather get your hands on your tax-free equity in the next couple of years, consider this:
Over the last ten years, we’ve enjoyed a strong sellers’ market where buyers just paid the price. There was enough competition that if you didn’t pay the seller’s price, somebody else would.
But the competition has dwindled lately – there aren’t as many buyers looking.
Let’s don’t call it a buyer’s market just yet. Let’s call it neutral.
Buyers feel they have more negotiating power now, which means they are:
The real struggle is with homes that need work – buyers are passing on the fixers altogether unless the price is right. Sellers used to get away with selling a rough-looking home for just a little less than the superior homes, but now the 5% to 10% gap is back (or more).
Once the market has turned that corner, it probably won’t just bounce back to being a seller’s market – it’s more likely to stay neutral.
How do you know if you should sell now, or take a chance?
Here are ways to decide when to sell:
If there’s a moment when all four are happening, then you know it’s time – do it!
Could the comps get better next year? Maybe – it only takes a couple of real premium properties to sell nearby and you could add 5% to 10% in value within a few months. But it could go the other way too.
Once buyers they recognize a slower market, they will only want to pay the same as the comps, or less. They will wait patiently for the highly-motivated sellers who price their home closer to the comps – or wait until you lower your price.
The local real estate market around you is a fluid situation, so let the comps help determine your decision. If the sales price of the last house sold near you is an acceptable price for your home, then sell when the inventory is low and you’ll get all the attention.
An example of how quick it can turn:
The house I just sold on Segovia in La Costa was the only house like it for sale when we hit the market. But over the next 30 days, another ten homes listed nearby, which diminished our negotiating power. We had to lower the price to stay competitive, and finally sold for 6% under our original list price, which isn’t the end of the world – but we were more optimistic when we began.
There can be a 5% to 10% variance in price when selling any home. The four nuances above will be factors, but the best thing you can do to sell for top dollar is to hire the right realtor. Contact me at (858) 997-3801 and we’ll discuss what I can do for you!
Compass intends to comply with NAR’s Clear Cooperation Policy MLS 8.0. In addition, the corporate staff will work the MLS to see if we can create a Coming Soon section, like many other areas are doing.
The 8.0 policy legitimizes the Coming Soon marketing, and allows for the Office Exclusives, which is already set up on our internal website. This is why we went to Compass, because it was clear that the game was changing, and the biggest brokerages with the best listing agents would be the most successful – while the little guys get squished.
After less than two years in business, here’s how Compass is doing in Encinitas. Year-to-date sales:
Click to enlarge
Somehow the buyers didn’t notice these bumps in the putting green until late in the process, and they didn’t look like a problem to me. But hey, if it’ll make you happy, we’ll fix it for you!
Our assistant Brittnie is a licensed realtor, and for months she has been working with a couple in search of the right entry-level home. Buyers at the low-end of every market have had no negotiating power for the last ten years, but some of the softness in our soft landing can be attributed to pilot error – the listing agents are still (too) cocky.
They made an offer that was 8% below the list price on a home that had been on the market for 3 months with no price adjustment. It was easy to figure out why it wasn’t selling – it hadn’t been remodeled (the type of homes that might have gotten lucky before, but now are struggling to sell).
The sellers counter back at 2% under list, and the agent tells Brittnie on the phone, “Don’t even think about countering the price”.
But that’s not all.
He also included the usual terms left over from the high-flying days:
1. Sold as-is, no repairs.
2. No termite.
3. No home warranty.
The buyers walked.
Previously, all buyers who were frustrated enough by bidding-war losses and rapidly-rising prices would succumb to the demands of the listing agent just to get it over with.
And it’s not just the terms, it is the attitude of the listing agents that is a turn-off too. Buyers aren’t going to put up with it when they see houses languishing on the market these days.
Another favorite is for listing agents to crank down the contingency period from 17 to 10 days. I had one do that to me yesterday on a house that we already confirmed had no permits on record at the city (it’s an older house).
I asked him if he was going to cancel the deal if we didn’t release contingencies after 10 days. His answer? “Hmm, well, I don’t know.”
Is it worth it to put the screws to the buyer in the middle of November on a house with no permits just so you have the option to go back on the market around Thanksgiving?
If the market sluggishness continues, some of it will be self-inflicted.
Get Good Help!
Drone footage inside and out of our Solana Beach listing:
The truth about our success is slowly being revealed:
Thanks Gary!
Remember before the last crash when buyers and sellers were far more cavalier about their real estate decisions? Why was that? Because if they needed to move again, there were always a reasonably-priced house down the street or around the corner for sale.
But things sure have changed.
Selling/buying/moving is no longer just something you do casually. Because of the difficulty, you are probably only going to move if, and when, you decide to make a permanent lifestyle change.
Look at the differences just since this blog has been around:
NSDCC January through September:
| Year | #Detached-Home Listings | Percentage Over $2M | Percentage Under $800,000 |
| 2005 | |||
| 2019 |
The noteworthy:
There Are Fewer Homes For Sale – In particular, there are fewer high-quality homes for sale that would make it worth it for existing homeowners to move up or down. In spite of having loads of equity, trying to find a home better than your current home is a major obstacle.
Home Prices Are Higher Than Ever – If you can find a house that suits your needs, the price will be higher than ever. You have to pay more, qualify for more, and be willing to eat higher recurring costs like property taxes too.
Cost of Moving is High – Gone are the days when you could throw everything you own into a U-haul and move in a day. Commissions, closing costs, packers & movers, home upgrades, and new furniture will cost you $50,000 to $100,000 or more in any house you buy around the NSDCC.
Competition is Stiff – As a result of the three items above, buyers are very picky and holding out for the highest quality. Staying on the edge of your seat 24 hours a day can take its toil!
It’s a Market For The Affluent – With only 5% of the NSDCC houses priced under $800,000, it means home buying is only for those who have real horsepower – and regular folks are priced out, unfortunately.
The stakes are high, and making any mistakes now will be very costly. The worst part is that home prices are moderating (except in Solana Beach), and without an increase in their equity position, those who need to sell shortly after purchasing could incur a substantial hit.
We are in the No-Mistake zone. Get good help!
P.S. The Solana Beach house on Rios that set the all-time non-oceanfront price record in March at $8,250,000 was relisted for $9,750,000…..and it went pending today!
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01991628, CA DRE #00873197
