Real Estate Has No Short Term Fixes
Some people who decide to sell their Bonita Springs home find out the value that they had in mind isn’t really the reality of their current situation. Well, I guess a fair number of them find that out, not just some of them. There is a photo snapshot in their mind of some fantastical number they saw on a flyer or a postcard that showed up in the mail and it was chiseled in granite.
I can understand the disappointment when owners find out that the value of their Bonita Springs real estate is worth less than they imagined or assumed. I’m disappointed that my home isn’t worth what it was worth a few years ago, too. For some people their home is their only true investment, for others they were living their dream in more prosperous times and the weight of the debt or upkeep of a second home or vacation home is just starting to pinch a little too hard.
There are those who recognize the reality of the current real estate market and even the reality of their hyper local market and price appropriately to sell. There are others who deny their circumstances and say, “We’ll just wait a few months”, “We’ll just wait over the summer”, “We’ll wait until after the New Year” or “We’ll wait for prices to go back up and then we’ll sell.”
Don’t get me wrong, I believe that for the most part I’m optimist about our local real estate market. I know real estate in Bonita Springs is selling and that the market is moving. I actually see the market getting better every month when I do inventory market reports. Every month we’ve been peeling away a few months of inventory and that’s good. It’s just an equation. We have to absorb the inventory to fully recover and stimulate positive growth.
That being said, when a seller says they want to wait for prices to go back up before selling or pulling their home off the market for a few months to “see what happens” it surprises me that they’re so optimistic or starry-eyed. It almost never occurs to them that value in their particular neighborhood may, in fact, go down.
Seriously, what if waiting a few months for the market "bounce back” went by and that anticipated bounce never actually happened?
I’ve seen it happen on more than one occasion. Some sellers have been disappointed with the estimated value of their home and they’ve held off so prices would go up only to discover months later that the exact opposite had occurred. Who ever said prices would go up just because a person really wanted it to?
Real estate is cyclical. There have always been peaks and valleys and there always will be. I don’t doubt that it will be very different and much better down the road. What I do wonder about is the length of the road for some. Heck, some of the time frames that sellers put on their wishful thinking of prices jetting back up are as short as their driveway, not the road.
The market is peppered with property owners that are waiting for things to get better so they can sell. Just because their home was once worth xyz at one time should they hold out for that? Is that realistic? Is it reasonable to believe there will be an up word surge in pricing just while their home off the market for a few weeks?
I often wonder if in our microwave oven, reality TV show society, consumers have just become impatient and anticipate immediate results. Why not? They’ve been conditioned to.
Where is the guarantee that buying real estate will always be profitable? Where is the guarantee that all stocks go up? Is that guarantee of price and profit for all real estate? Does real estate purchased at the peak of the market deserve to be sold today at the price it was purchased at with so many other choices available?
I don’t doubt that those premium prices of yesteryear will eventually be back. It’s the “when” part that we have to wonder about. It’s certainly not happening during the period that a seller pulls their property off the market and waits a few meager months. In some markets it’s not a “wait a few months” fix. There are even a few neighborhoods, depending upon investor load and inventory, where it may not even be “a wait a year” fix.
It’s about inventory, plain and simple. Taking a home off the market for three, six or nine months won’t work when there’s twenty four months of inventory. Even if there were only a couple of months of inventory it would also have to be accompanied by demand and credit worthy buyers.
Sellers hoping for rapid recovery back to premium, imaginary pricing is nearly as futile as a buyer with bad credit and no money to put down, holding out for an imaginary mortgage that they believe they should be entitled to just because this is America, the land of opportunity.
It took years for the real estate market to get into this condition. It certainly isn’t going to magically rebound during the time a home is pulled real estate off of the market for a couple of months.