It's difficult to give you a simple answer. I've found that there are always ways to make good deals with a little creativity and a lot of planning. Please give me a call if youâ€™d like to find out whatâ€™s available in the market that might work for you.
Coldwell Banker Residential Real Estate
Contact: Hobbs & Company @ 407-416-9845
Palm Springs Realty (Commercial & Residential)
U.S. Housing and Urban Development Approved Broker
Licensed Real Estate Broker, Mortgage Banker, CPA (inact)
Your question is about the Timing of a sale which you seem certain to make one dayâ€¦ but ultimately it is really a question of financial analysis.
There are at least three separate timing related elements to consider when determining what is best for you to do today, and all three will rely on forecasts or expectations about the future and available alternatives. A) Market Timing the price sold/ and price purchased (likely your foremost question here), B) Personal Timing of your Retirement, and C) Alternative Investment Choices (or broadly the opportunity cost of ownership).
The personal timing of your retirement is something you need to consider first. Will you downsize? Relocate to another area of Florida? Perhaps to a another State altogether? If you plan to move, then the market conditions where you intend to relocate To are just as important as the market conditions here locally. While Florida, California, Arizona, Nevada, Detroit, etcâ€¦ have been hit hard, and are likely to remain distressed markets for a number of years to come, most other areas of the country were affected to a far lesser degree and have/are stabilizing now. The extreme local events here are certainly not the norm on a national basis. So, while considered alone it may not appear to be the ideal time to sell locally in Florida, it may be the perfect time for you to repurpose and redeploy your capital to purchase a home in another area where you ultimately want to relocate for your retirement. If you are remaining in the area, and downsizing, then the calculus is similar, just to a smaller degree on the % differential. But, because of your retirement plans, that combined analysis deserves serious consideration as it relates to your short term retirement goals and objectives.
As for local market timingâ€¦ truthfully, no one knows, but based upon the acute lingering issues of negative equity, unemployment, foreclosures, and short sales no one can predict with a straight face that prices will be meaningfully higher 5 years from today. Many forget the time period from 1990-2000 when there was a local price boom, followed by basically 0% appreciation for a decade in the Orlando market. If we now start to see inflation without a corresponding increase in wages, then home prices could deflate further in areas with excess supply (like Florida) as the increased cost of credit reduces affordability and pulls down prices. Whatever happens, there will certainly be excess supply, distressed assets and muted demand for at least the next 5 years locally. Even today with historically low interest rates, and positive demographic factors, based upon the current rate of â€˜supplyâ€™ reduction it will likely take at least that long to work through the inventories (assuming the volumes and market conditions remain â€˜stableâ€™ ). So from a price perspective, waiting to sell likely makes little sense if you plan to relocate or downsize in the next 5-10 years.
Finally, if you have equity or assets, you should also seriously analyze your expected rates of return over the next 5-10 years. Primarily, the return on equity in your current property, weighed against the opportunity cost of alternative investments. Expecting anything close to the historical average of 3%/y price appreciation over the next 5 year is certainly wildly optimistic for the local market where prices have continued to show negative y/y returns since 2007. As mentioned above, the easy comparison of expected real estate appreciation outside the area vs negative to flat price appreciation locally is likely a big factor that could drive your decision to sell today. Just as leverage magnifies ROE gains when there is price appreciation, is also magnifies the losses when there is price depreciation. If you believe there is/will be some nationwide economic recovery, then inflation should drive alternative equity returns, while at the same rising interest rates may cause some amount of additional real estate deflation in oversupplied markets. The expected rates of return for competing investment alternatives merits some serious thinking, especially if you are currently holding a highly leveraged but depreciating asset.
When looking at the data, and the oversupply situation, I believe it is unlikely there will be significant price appreciation locally for the next 5 yearsâ€¦ prices have stopped their free fall, and have begun to stabilize in some areas (especially for moderately priced homes) but prices could quite easily continue to trend lower over the coming years for custom homes priced above $400,000 in the local market.
Email is John@JohnABennett.net
Best to you.
Mhc, if you're willing to pursue some of the more creative alternatives, then you might consider doing a swap, or selling with some seller financing. Another option is to work with one of the temporary executive house leasing companies in the area.
I have worked the Lake Mary/Heathrow area for several years now. I finally see prices stabilizing in your area and even a slight uptick in pricing in certain areas Heathrow included. For example, last year there were several homes in the very low 200's a few even lower in Heathrow, and now most prices are above 250k with less inventory available. However, prices are still in the doldrums and have no real discernible upward momentum. From what the reports are saying our recover lies with the job market and as we see less unemployment we will see more stimulation in the housing sector.
So long story short, if it was me I would hold until more of the foreclosures exit the market and home inventory gets a bit tighter. However, if you are looking for a deal, now is the time to buy and taking a bit of a hit on the selling end may be worth the savings on the buying end.
Hope that helps,
Jennifer De Vivo
The De Vivo Team
Dec Stats ORRa
40O k TO 500 K 13.5 MONTHS SUPPLY
500k TO 600K 15.5
600K TO 700K 21.5 MONTHS
700K 800 18.7
800K TO 900K 11.4
900K TO 1,000 K 45.5 MONTHS SUPPLY
1,000K UP 28.9 MONTHS SUPPLY.
SO, IF you can - hold.
Frank Dolski MBA, ABR, e-PRO
CARTUS Certified Relocation Specialist
Coldwell Banker Hearthside Realtors
215-794-1070 x103 (office)