It’s a funny thing about markets, everyone wants to buy at the top, but no one wants to sell. At the bottom, suddenly everyone is selling. And no one wants to buy. Market psychology is almost impossible to resist, but knowing how it works and keeping one step ahead can be very profitable.
The bottom line is, it’s a great time to sell.
Are we near the top of the market? Maybe. Prices are at an all-time high, but there are certainly signs of slowing. The LA Times noted that only 17% of buyers think it’s a good time to buy a home, down from 31% a year ago. “Buyer fatigue” is setting in on homebuyers who spent the summer shotgunning offers left and right to no avail.
We are no longer seeing bidding wars on every property that comes on the market, but for the chic homes with savvy marketing being sold by sophisticated agents, your bidding war is still available. Our buyers can attest that it’s still bananas out there. Prices in LA County are up almost 20% over last year. And the homes everyone wants are still flying off the market in less than two weeks for hundreds of thousands of dollars over the list price.
Wait, but if I sell my home don’t I have to buy? Yes, but we have strategies to help you find your dream home. And we know how to get top dollar for yours. Most of our clients have received offers beyond their wildest expectations; the comps barely matter at this point. Rent-free leasebacks have become commonplace for sellers who need a couple months to find their next home. That’s right, you can sell your home and stay there at no cost until you find your next one. It’s nuts.
And, investors, listen up! If you have rental property that you bought longer than 5 years ago, it might be time to trade up, using the 1031 tax-deferred exchange. We help you find a bigger, better, newer property, and “roll” your current equity into it as your down payment. No cash needed, no taxes paid. Personally, I’m looking through what I own, checking in on my equity, and staying on the hunt for “upleg” properties to increase my cash flow.
Remember, the ideal time to hold real estate is NOT forever. Keep trading up and don’t get stuck. I’m calling past clients right now, people who bought rentals in NELA 15 years ago, and telling them it’s time to swap that Highland Park duplex for a 6-unit in Glendale. The equity upside is so much greater. The 2042 version of you (and your kids) will thank you.
We all know that investing is a game of being early and buying before everyone else buys. But it’s ALSO a game of selling before everyone else sells.
Thanks for reading. Hang in there everyone.
P.S. This essay about compound interest is worth a read. Give it to your kids. “... a house might be the best investment most people ever make. It’s not that housing provides great returns – it does not. It’s not even the leverage. It’s that people are more likely to buy a house and sit on it without interruption for years or decades than any other asset. It’s the one asset people give compounding a fighting chance to work.”
P.P.S. Real estate book recommendation. A local LA broker wrote it. I like it. As my mentor with 50 rental houses taught me: “Buy one property a year, any property, anywhere, and don’t sell.” Billion Dollar Portfolio: How to Create a Real Estate Empire