Should I Sell my Boise Home Now?
The morning of February 1, 2011, I spend a good deal of time searching the internet for a correlation between stock market prices and the housing market. I found very little on the subject but I did find a lot of very interesting information.
As far back as 2007 you start finding articles talking about how the housing market will not start rebounding until late 2008 and 2009. Well here we are at the beginning of 2011 and prices are still declining. We have had a few fake out months, especially in the spring of 2010 when the homebuyer’s tax credit was artificially elevating home prices.
Last year was a great selling year for us because we did so many short sales. We got to the point where we would rather have a short sale than a not short sale. Even though many buyers shied away from short sales because of the time it took to close the deals, they bought them because the prices were compelling compared to sellers who "thought" that their homes were worth more than they were/are! Again, especially during the spring, with the homebuyer tax credit tricking everyone into thinking prices were stabilizing we would get good, reasonable offers on not short sales but the overconfident sellers would be unbugable, loosing offers because they would compromise there price. Now many of them are still in their house, listed at much lower prices than the offers they could have sold for in the spring of 2010.
So here is the question that you may be facing now. Should I sell now, or hold out for the turn around. Here is the answer: You don’t know when the turnaround will be! I don't know when the turnaround will be and NO ONE really knows!
If you listen to Yale economist Robert Shiller, and look at his chart, you might think we are at the bottom. If you look closer we are still 20% above the 0% line which is back to the base. But Shiller and his chart are not giving the entire picture at all. To get back to the average doesn’t it make sense that prices will have to drop to below the base as far as they overshot it? It does. It doesn’t mean that that IS going to happen but if you look at long term charts that is certainly the way it looks.
Should the above happen, housing prices could keep falling and not return to the base until the overshoot which could take until 2012 and take until 2016 or even 2020! So returning to the question of selling, if your living in the house you are going to live in until say, 2017, or 2020 it probably isn’t going to mater what you do (did) by then. But if you are in a position of having to move for the next five years you are taking a clear risk. Especially if you are moving down.
If you are going to buy a more expensive home after you sell, or move to a more expensive area the trade may even out the difference. But if you are hanging on for the turn around, or stubbornly chasing the market down with your home for sale now, like millions of others you may crash before we hit the bottom. Look at the article and charts on http://www.marketoracle.co.uk/Article25597.html. There are three charts on this page so you need to scroll down and look at all of them. Call me and I will send you the local housing data. I am not selling my house because I don’t want to move. But if I were moving in the next two years I WOULD be selling now and locking in the last 20% to even 50% that I might lose before the probable real bottom that could be in somewhere between 2012 to 2016 or even 2020 comes around.
One other thing should be considered: It really looks like (because of the “wealth effect”) that home prices lag the stock market. The general economy lags the stock market and the actual wealth which allows for home price inflation lags the economy. Again I say no one knows the bottom for sure. But the truth is that very few actually buy at the bottom and sell at the top. Time is the regulator.
To look at the best Boise area real estate web page go to www.BoiseMeridianRealEstate.com. For a free market analysis on your home call Jon Gosche at 208-870-2115.
