If you own a high end home in Silicon Valley and you are considering selling your property at some point in the near future, I have a question for you: what exactly are you waiting for?
Please understand. My question is totally earnest: no tricks, no ulterior motive. I would love to know what is actually causing you to delay putting your property on the market. I am sure you have a good reason; I am just curious as to what the reason is.
You see, I am a little puzzled because, from my point of observation, it seems like the right time to sell. If you are in the San Francisco Peninsula, the South Bay and much of the East Bay, the market is buzzing, particularly in the million dollar range. You list a property one day and there is a good chance that it will be gone in a matter of days if the price is within shooting range. There is also a good chance that a few would-be buyers will fight over it since there is so little inventory available to be sold.
The MLS stats reflect the fact that new sales are outnumbering active listings about 2 to 1. Looking at the number of multiple offers on homes priced between $1M and $2M, you would have to conclude that you have 3 buyers for each home. I am not surprised that buyers are coming out of the woodwork in masses after years of economic slowdown. This is clearly shown in a recent NAR study which points to the fact that in 2011, “typical sellers” sold their home after 9 years, while between 2001 and 2006, the sellers’ tenure in a home was only 6 years. That can only further exacerbate the pent up demand phenomenon.
So, no surprise there. What does surprise me is the fact that so few sellers are taking advantage of the opportunity this above reality is offering them on a silver plate. Hence my original question: if you are thinking about selling, why not now?
Let me list a few reasons, pertinent or not, to try to guess what yours might be, and then I will give you my take:
• Prices are just starting to go up; I don’t want to rush selling if it ends up costing me plenty in potential appreciation over the next few months…..
AP: OK, I hear you, you may not lose much by waiting, unless of course you are buying up, in which case your argument is working against you: the more expensive property you are looking to buy will logically appreciate more & faster than the one you need to sell.
• When Facebook’s IPO strikes in May, a crowd of jackpot winners will pay a lot more for my home….
AP: Perhaps but I hate gambling on future bonanza since much of the fuzz about forthcoming IPO’s has been in the news for months and the real estate values correction has already been integrated in today’s prices. There is not one single listing on the market which does not reflect this anticipation.
• I read that next year the market might be even stronger….
AP: We’ll see. Nobody knows. To be honest with you, I too thought a few months ago that 2013 would be a dandy. I still kind of feel that way but I don’t know anymore whether it is because I successfully convinced myself or because I have objective tangible indicators proving the point. The fact is the economy is so manipulated by politics these days that you just cannot smell the market more than 6 months at a time.
• Mortgage money may get even cheaper….
AP: I don’t buy that one. It would be more reasonable to assume that if the rates move this year, it will be in the other direction.
• I would love to sell but It’s awfully tough to find the right home to buy and then to move quickly before another bidder snaps it!…
AP: I know, and that’s the whole point of what I am saying. We need a lot more listings to choose from to satisfy the demand. Is it likely to happen? Well, a lot more new properties are going to hit the market in April & May but…a lot more buyers will be in line to get them. No change really. The market is what it is. Persistence leads to winning.
Conclusion (strictly from my perspective): if you wish to sell and buy something else, do it. You may not find and buy the perfect home in the perfect location and at the perfect price, but you know what? Nobody does, irrespective of the market. Love is rarely at first sight.