“Lessons” For Every Housing Market
Should I stay or should I go now?
If I go there will be trouble
And if I stay it will be double
So you gotta let me know
Should I stay or should I go
–The Clash, “Should I Stay or Should I Go?”
According to the Chinese zodiac, 2010 may be the year of the tiger, but in the housing market, it’s definitely the year of . . . the tortoise.
The Buyers who’ve been looking the longest — upwards of a year(!) or more in some cases — have definitely seen their choices improve during that span, particularly in the upper brackets.
For example, I’m personally aware of several homes in the west suburbs that originally listed in the $800’s way back in 2008 that are still for sale, except that their asking prices have dropped into the $600’s.
The lesson such Buyers have learned? (assuming, of course, that they really are Buyers)
It pays to wait.
Re-wind to 2003
Contrast that with the lesson Buyers “learned” 6-8 years ago.
Back then, Buyers discovered that waiting a year to become more financially established, save up a bigger downpayment, etc. was a mistake.
That’s because the housing market was appreciating — strongly.
I remember one client in particular, a young couple who wanted to buy a $200k house around Lake Nokomis, and decided to hold off for a year.
While they were socking away another $10k, the $200k houses they were eying suddenly started fetching $220k or more. And interest rates had climbed, adding insult to injury.
In fact, the foregoing phenomenon was repeated annually for a stretch of 5-7 years, if you (correctly) count 1998 as the beginning of the epic housing bull market.
Take-home lesson: don’t wait.
Sooner or later, it will be better to be a housing “hare” again (“early bird” might actually be the better term, as in, “the early bird gets the worm”) . . .