Why are homeowners who are thinking about selling as well as purchasers who were contemplating buying pulling back and slowing down their decision-making by holding off?
My professional and personal opinion is that they are going through a phase I call F.E.A.R., which means Fanaticized, Expectations, Appearing, Real! However, what really affects changes and slows markets is the psychological aspect from the statistics and information that the U.S. government and other gurus come out with that can be both somewhat accurate and inaccurate while influencing the mindset of the selling and buying public.
This is especially true for those who should be selling at the most opportune moment in time as the demand is still @ historically high, but either decide to wait, or worse, procrastinate and put off making a more advantageous and positive decision for themselves to preserve the majority of their most valuable asset represented by their home. As I discussed in last week’s column, waiting will not be to one’s advantage whether selling or purchasing when you factor in the current interest rates at the time of either event.
I have done an Excel spreadsheet that proves that waiting will be detrimental to your pocketbook and future wealth retention. We are currently in a perfect storm for sellers and buyers. However, there are always exceptions to everything, but for the majority who are thinking about selling and/or purchasing, waiting will not be in your best financial and wealth-building future.
I have seen the graphs and analysis over the last several months and realize one thing, as mentioned earlier in the column, is the beginning of the “fear factor” which is for the most part unfounded. Those waiting to sell as well as those who were considering buying, need to ask themselves why? Is it because you feel that prices will continue to accelerate by double digits and why not wait longer to capture just a little more or if you are a purchaser, that we might be at the top but don’t understand the cost of your monthly “nut” if you were to wait until prices come down? The answer to that scenario is a bit of greed and not understanding the market.
What do you think will happen when eventually interest rates go up; do you think it just might have an effect on your listing and selling price? If you do not think this will occur, “I have a cheap bridge to sell you.” Possibly you just aren’t very concerned or don’t care about the price or value of your home and how much you can gain financially if you were to sell because you just feel extremely comfortable where you at the present time and you also have a winter domicile and are either a snowbird or a snowflake.
You will be at your primary home until the end and then your children will deal with it, right? Well, if that is the case, when is the last time you updated your will? Recently, five to 30 years ago? No one considers that we have three guarantees in life, “birth, taxes (if you make any amount of money) and death. The rest is negotiable!
Do you have a living trust to handle not only your home but all your assets and investments? You as a potential future seller have a lot to think about to prepare for whatever path you might take. Buyers who have either left the market or are now deciding to pull back, also have a lot to ponder and contemplate as to why they have come to that decision.
Then there is the group of individuals and families who have moved and relocated out of New York City as well as permanently from New York state and other costly states to other more reasonably priced states. Yes, we all know that the Covid-19 pandemic had been and still has a major impact on those who have decided to move to less populated areas with more space, privacy, and home offices to be able to work. Now the new and current Delta Variant has been added to the mix and also added insult to injury in contributing to the future decision-making process to stay put or to move out of the densely populated cities.
The other factor that goes hand in hand with all the other negative issues is the consistent and persistent escalation of prices way too fast and way too far in a historically low inventory market way to make many buyers feel comfortable. But in the end, F.E.A.R. should not enter into the equation. But solid, pragmatic and logical information as “critical thinking” (critical thinking is no longer critical©) is necessary to ascertain the proper and more important conclusion leading to a more accurate answer and solution.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com Just email or snail mail (regular mail) he with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.