San Diego Housing Market News and Analysis
When to sell your house(before, at, or after peak)?
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Submitted by BradPitt on September 24, 2006 - 12:28pm
Some people sold their house in 2004 or early 2005 because they heard of the bubble, and I don't understand why. They could've gained 20 to 40% more appreciation and then sold their house even at 5 to 10% below market value for a quick sale.
Real estate is not like the stock market and does not plummet in a few months unless there is immediately massive job loss. Even if you sell it during a cooling market like right now, then you have taken advantage of all the appreciation and now face losing a few percent profit. Even though increase inventory is competing with you, sellers are still delusional and trying to sell their houses at above market value.
I don't understand why Robert Campbell speaks of trying to sell before the peak, when you could easily sell it after the peak. Because who really knows what the peak is due to exuberance. But when it comes back down(very slowly) you can take advantage of seller denial(almost always there) and price it right.
For example, lets say RE prices are dropping 12% a year. Then you stand to lose 1% a month. So if you price it at 6% below market value, you are ahead of the drop and buyers who still want to own will appreciate your being reasonable and realistic. But the situation right now is no where near that tragic scenerio. We are still slightly appreciating in Southern CA. I like to think of real estate as stocks in really slow motion. There is a lot of forgiveness.
What do you guys think?
Ps. I'm talking about people who have bought houses several years ago and not people who have recently bought and are still trying to make a profit. If you've bought recently, then you would stand to lose a lot even if the market just levels out.
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