A Healthy & Balanced Real Estate Market Needs.....
People Moving In - People Moving Up - People Moving Down - People Moving Out
There have always been more people who want to live in Marin than there are homes to sell them. That's nothing new. A common refrain these days from "fence sitting" sellers is, "I don't want to put my home on the market because I might not find a replacement property." It seems to be creating a self-fulfilling prophecy of low inventory and off- market match-making. The real estate PR machine keeps stoking the fire.
What feels a little different about the current real estate market is the imbalance in the type of housing and the demographics driving the market. A healthy real estate market depends on people moving in, moving up, moving down and moving out. The "move-up" market, those buyers who would like to buy a bigger or different home feel "stuck" and afraid to put their home on the market for fear they won't be able to find another home or be able to compete with multiple offers. Therefore, they aren't freeing up homes for those people moving in or those wanting to move down.
Then we have the Baby Boomers who are retired or nearing retirement. Many would like to sell and take the equity out of their homes but are undecided where to go or what to do. Or, they want to stay in Marin and downsize to a home of equal or lesser value in order to keep their Prop.13 Property Tax. They are also "stuck" and afraid to put their homes on the market for fear they won't find a home in Marin or won't be able to come back if they change their mind after selling. Many are choosing to rent their homes because it provides income for retirement in this low interest rate environment. Therefore, they aren't freeing up their homes for the "move-up" buyers.
I'm not a social scientist or demographer and I'm sure it's more complicated than what I see in our little slice of the world in Marin. Nevertheless it feels circular, self-fulfilling or whatever you want to call it when sellers are afraid to put their homes on the market even though they want to move up, move down or move out.
There's no magic bullet but here are some ideas if you are a seller sitting on the sidelines:
- Have your home ready to go on the market so if you find a home to buy, you are ready to go on a moment's notice. That means having presale inspections, making repairs, painting, cleaning, decluttering, staging and having your home professionally photographed, etc.
- If you do want to make an offer on a replacement property contingent on the sale of your home, be prepared to pay a PREMIUM to get a seller to consider it.
- Negotiate a 30-60 rent-back if you need time to find a replacement property.
- Make the sale of your home subject to finding a replacement property. This strategy works best if you don't need to sell first and have the cash or can get a loan to purchase another home without closing on your current home first.
- Bridge loans are available if you feel confident enough to buy first and then sell. These loans will cost you extra money but in certain circumstances, it might be well worth it and a good strategy if the right home comes along.
- Sell first and be prepared to move into a short-term rental or possibly find a housesitting opportunity while you look for a replacement property. This may not work for everyone especially if you have pets or young children. However, speaking from experience, it can be very liberating. You're in a position of strength when it comes to making an offer on a home, you have the time to find the right home and you know how much money you have to spend. It also gives you a much needed respite after cleaning, packing and moving out of one house before you have to do it again in a new home.
Carpe' Diem Sellers!
Janis Peterson, Realtor
415-271-3109 or [email protected]