Market Guidance from our Real Estate Coach
We now have seen that they've extended the moratorium on foreclosures out from March to June, so we're headed to that September time frame where we think that maybe things might start to free up. But we now have seen them extend the moratorium on foreclosures from March to June. That is going to continue to put a restriction on inventories into the marketplace. Because of the ice storms in Texas and North Carolina and across the country in several states, we're gonna see a restriction with workers being able to complete houses and product and get it to the market.
So what that means is that you're gonna see massive restrictions on supplies and inventories. As I mentioned earlier, and I'll mention it again, this is a market where you run 30 day comps and then you estimate what you think is the manual comp, based on if there are no inventories in your neighborhood to speak of, and there's nothing for sale, and you have the only house on the market. Then you need to prepare to list it low to be able to bring in many buyers and then work your bid up from Friday to Friday and then into the next Monday, so you get two weekends to work your bid up to your highest and best offer.
It takes a skilled agent or broker to be able to work the other agents, to be able to bring them up to their highest dollar, based on the fact that they don't have any other option as far as purchasing. Interest rates are extremely low and inventories are extremely low. The weather, COVID, and foreclosure restrictions are going to have effects across the board with those wanting to buy a home and can’t because of the lack of inventory. So we're now into 30 day comps, not 90 or 180 day comps, with manual projections as to where the market will go via price.
So for anyone I had a client the other day that picked up the phone and called me said, “Based on the market and what your recommendations are, I'm thinking that I want to sell my house right now. Can you run comps on it for me so that I can see where I need to list it and what you think I will get for the home?” That's a very smart move. If you want to get in a good financial position, and your family is willing to transition, there's not a better time to even sell your personal home, let alone your investment properties. You liquidate all those and get to a cash position, as quickly as possible. But if you sell your personal home, that's the right move, but don't do what most people do, and that is say “I want to sell on the high side of the market, so I can go buy on the high side of the market.” That is improper math and economics. You sell on the high side of the market, then you go find a home in the area that you think you might want to live in, that you can rent. Then you rent through the down cycle, until the inventories are tight again, and then you buy at the bottom. You will pick up your greatest margin through purchasing the home at the bottom, selling at the high side of the market and buying back in at the low side of the market. Don't make the mistake of buying back in on your personal home if you sell it. That’s my guidance for this week.