When real estate markets shift, as they always do, it’s confusing to know when to sell. Timing can make or break your success. Add to that a worldwide pandemic impacting different locations in dramatically different ways. It’s easy to understand why so many homeowners are uncertain about when to sell.
Move with the market
When markets shift quickly, this advise is hard to follow. Trying to move with market changes can feel like surfing on a big wave. You want to get on the board at the right time and make sure you don’t fall off.
We are seeing rapid shifts in different neighborhoods, some dramatically positive and some hurt significantly like Center City luxury.
I heard the quote “chasing the market down can feel like catching a falling knife” which is indeed true.
A tale of two luxury homes
During my first year as a full-time realtor on Kauai, I worked with two sellers who both owned luxury Bed & Breakfast properties. The market had escalated significantly due to the mortgage crisis.
These friends both decided to take advantage of the sizzling luxury demand. One listed his property for $1,750,000 and the owner of Aina Manu Place listed his at $1,650,000 with some friendly competition.
In 2005 values were still strong, but demand started to soften, with days on market increasing. We weren’t aware of the pending ‘tsunami’ devastation of the mortgage crisis. But it was evident that prices couldn’t continue to spiral upwards.
The owner of Aina Manu Place was willing to make price adjustments and we got it under contract at $1.5M. However, zoning violations came to light and that deal canceled. We worked diligently on solving the zoning issues, and SOLD it to the same buyers for $1,250,000 one year later in 2006.
This owner was wise to move with the market, and recognize his win rather than focus on the his original asking price.
He bought a distressed oceanfront property in Florida where his family is enjoying life.
Many sellers had a mindset that they “would wait for the market to come back.” What they didn’t understand was the spike in values was a phenomena, not “the market.” The second owner did not adjust his price, the property did not sell and those values have not returned.
Main Line and Center City shifts
The COVID-19 pandemic has impacted real estate communities on the Main Line and in Center City very differently, as it has across the country. Suburban home values have escalated while Center City luxury markets are softening.
Market predictions and reports from national leaders repeatedly cite that today’s market is not the mortgage crisis, drawing the conclusion we won’t face some of the same challenges with economic uncertainties.
However, what is similar is that dramatic price shifts in both are driven by external phenomena, not directly related to real estate.
COVID driven market shifts
COVID has made us all look at “home” differently, causing massive movement in all market segments across the country. That’s driven record numbers of sales in some areas, and dramatic price increases with competing offers in others.
I don’t see the COVID driven buying dynamics decreasing until our post-COVID normalcy stabilizes likely in late 2021, or into 2022.
That new normal will not strictly be a return to our pre-COVID reality. Working from home is not going away.
What that means for suburban housing as well as urban values driven by commercial space and restaurants we won’t know in advance. But we can look forward learning from the past.
High demand with low inventory on the Main Line
On the Main Line where prices and demand have skyrocketed, owners who have considered selling should act now. The increase in values is a short-term phenomena driven by the effects of COVID.
Inventory will increase in 2021 and values will adjust as we move towards a buyers market. The new post-COVID market may very well reflect a different price range than we are currently experiencing.
No one can truly call a market until it’s with hindsight. But we can analyze facts at hand, learn from the past and create a plan for success.
If you are wondering about selling your home, get your instant valuation at HomeValuesbySusanna.com then let’s chat. I’ll share with you key strategies for success, including how to sell / buy safely during COVID.
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