Buying or Selling Real Estate Today

Should I list my house for sale? Is this the bottom of the market? Shouldn’t I wait a year or two until I can get a better price for my house?

All are great questions. And if I had the answers to them, I’d be way ahead of the curve when it comes to making accurate predictions.

But here’s the truth: The market is not stable.

No one really knows what is going to happen. We are not sure if this is the bottom of the market. We are seeing hints that there may be a larger-than-in-the-past release of bank owned homes coming onto the market but there hasn’t been a significant release that has made us all say, “See!! Just like we suspected! There it is! That Shadow Inventory!

And if we don’t, can’t, know what is going to happen with the housing market, it would be disingenuous, maybe unethical, to tell you to list your house NOW because if all those REOs (Real Estate Owned or banked owned homes) flood the market, housing prices will go down some more.

If all those REOs hit the market, the banks that currently own them will suffer greater losses than if they let them trickle out, a little at a time. On the other hand, there is speculation that some banks may not be able to hang on to their inventories of foreclosed homes for long enough to realize increased prices for them.

Honestly? It could go either way.

Here’s a story that ends with a reason to buy…

I sold a home in Portland in a nice neighborhood to move to California. We did not recoup the $180,000 of renovations we put into it. That was back in May of 2009. We did, however, sell it and make enough to put a small down payment on another house. Still, it stung. We bought our house in California at what we understood was the bottom of the market there (in the Outer Bay Area) and sold it a little less than 2 years later for  $61,000 loss. In the days before we sold it, we were losing $800 a day on it. We didn’t have to short sale because my broker, and I, took no commission on the sale. That was close! That stung even more.

We moved back to Portland last year and decided to rent. We didn’t have any down payment anyway but, frankly, we were in no mood to buy anything even if we did have a down payment. We were tired of losing money on houses.

The truth? We’d made a bit of money when the market was good. We wanted that again. And we were tired of not-that. So we are renting. Today. Now.

We just moved because the house we were renting was owned by great landlords. They are responsive and nice. I’d invite them into my home any day, and did! But the house has significant structural issues not to mention a creek that runs through the crawl space Summer, Fall, Winter, and Spring. The moisture level in the house was high enough that our piano was affected more than we were comfortable with. Though we had the nicest landlords we could have wished for, they were not fixing that house. It would not have been cost-effective to do so.

Ten months later we’ve moved to another house. It’s much larger and we’re paying less rent because it’s dated. The carpet is a mauve I haven’t seen in 20 years. The kitchen has tired-looking oak cabinetry with roundy oak cabinet doors. But I figured I could deal because it has a loft for my art space and a lot of sizable skylights.

After chatting with the neighbors, however, I discovered our landlord hasn’t made many friends in the neighborhood, least of which were the former tenants who put up with a water heater, stove, refrigerator that all died, and a raccoon and squirrel making hay in the attic just above the master bedroom – all of which the landlord was hesitant to pay to fix. So hesitant, in fact, the property management company intervened. Hesitant enough that the former tenants hot-footed it out of here and…you’ve probably guessed it, bought their own house. One that they will fix when things go wrong, one that they will take care of so the deferred maintenance doesn’t cause them anxiety, one that holds its value because of the things they do to it. Because it is their own.

We will be here a year or so but I’ve got my fingers crossed nothing goes wrong while we’re here. If it does, like the tenants who vacated before us, we will do the same if we run into the same resistance.

It would be nice to think about getting rid of this mauve carpet and putting down hand-scraped maple floors or Brazilian Cherry that will age into dazzling colors. Though the kitchen is really functional, it would be great to think about having new Hickory cabinets installed with a quartz countertop. And the stair railing that is loose, that would be cool to replace with something more modern.

Do you hear it? The reason for selling or buying in today’s market? Because you own it, you can make it better, and you don’t have to depend on someone else who may be guarding their bottom line with a far different perspective than your own to fix things when things go wrong.

If you bought in 2006 and are under-water, and don’t need to sell and you love your house, why sell? If you bought in 2006 and really, really want something larger, you can get out of your current house without having to short sale, and still have some money for a down payment on your next house, it could be a great time to sell depending on where, and in what price range, you’re looking for your next home. There are some great, great buys out there right now.

If you are realizing that renting is okay but you have run into enough challenging landlords that make you think you could really see yourself owning a house of your own, now is a good time to buy if you have a down payment and a decent credit score. Think 620 or above. If you bought in 2000 and you have equity in your house, and you have been thinking for a while now that more, or less, space would be really nice, now is a good time to move…and this applies to all of the above…because your money goes a long, long way right now. A long way!

While you might not get the price you want for the house you’re thinking of selling, neither is the person selling the house you want to buy. You’re in the same boat. But with interest rates this low, your money goes farther than it has in a long time so chances that you find something really amazing are pretty good right now, depending on the market in your target area, at your target price point.

Check with your Realtor before listing. A good one will go over all the possibilities with you and even take you out on a little look-see adventure to check out the homes in your target area, at your target price, to make sure there are properties out there that meet your criteria.

So, to answer the question, “Should I list right now?” I say, well, let’s talk about what you hope to gain from doing that to see if the benefits outweigh the costs of doing that. For you. Because everyone has a situation that is as individual as they are.

To answer the question, “Have we hit the bottom of the market?” I say, it’s hard to say. If the year-long trend is correct, maybe. But following a trend like that would imply we have a market stable enough to support a trend. And, in my opinion, we do not have that market stability yet.

To answer the question, “Should I buy right now?” my answer is the same as it is to the first question. Let’s sit down and figure out if you can meet your goals by buying right now versus renting. Maybe! But let’s be smart and talk about it. We can even go out and do a little window shopping too.

And to answer the question, “How’s the market?” my answer is this, it’s a great time to move for some and a great time to stay-put for others. And then I ask the natural follow-up to that, “Would you be open to getting together to talk about your plans? I might have some insight that can help you answer that question for yourself.”

I thought renting would give us a break from the responsibilities of home-ownership. But I have discovered that rental properties can be in far different condition than properties lived in by their owners. And there is a reason for that. People who actually live in the properties they own don’t want to be without hot water, without a dishwasher, without a refrigerator, and will not tolerate destructive critter-partying in their attics.

I miss home ownership. I miss the planning and the changing. I miss remodeling (Hell must have frozen over…I thought I’d never, ever say that!) I miss making a house my own. And I miss not having to put up with things like mauve carpeting and dated kitchen cabinetry that I can’t change.

Because if we did, even if he gave us permission to, I would be sinking my money and my heart into someone else’s house.

I have to say, after owning, selling, losing a lot of money, owning, selling, losing a lot of money, and then renting and now renting again, I prefer home ownership.

It’s a reason I don’t hear mentioned much in the news, but one that is very real to us and one that will be the primary motivator behind our next purchase – because it is ours.

If you want to chat about the pros and cons of buying and/or selling, for you, give me a call or send me an email.

Amy Munsey, Broker

M Realty, LLC

(971) 258-5500

(My website is being remodeled. Please forgive the mess!)