Home Selling in 85251>Question Details

Robert, Other/Just Looking in Scottsdale, AZ

Should I sell now or hold off?

Asked by Robert, Scottsdale, AZ Fri Oct 5, 2007

I suspect the value of my 2000 built 3 bedroom, 2.5 bath condo in the Chaparral and Scottsdale Rd area has dropped by about 10% since Jan 2007. Should I sell now or will values hold out with all the new condo construction in the area? I rent and am in no hurry, just would not want to loose too much more value on the property so is cutting out now a good idea? It was purchased for $195K in 2002 and last appraised value was $430 in early 2006. Currently I have researched and found it be in the $390 range.

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Answers

25
In general, unless you're prepared to make the property one of the best-priced on the market then you may be better off holding on. The risk in holding on is further erosion of the market - new construction likely will not be a benefit to you because builders/developers are undercutting the resale market through base pricing and all of the incentives offered.

If you don't want to lose more value, price the property well below the market - precede the bottom, if you will - and get out. This is traditionally the slowest time but well-priced, well-prepared properties still will sell.

At this stage, that appraisal carries almost no weight I'm sorry to say.

Best of luck to you, whatever you decide to do.
1 vote Thank Flag Link Fri Oct 5, 2007
The answer- If you need to sell, now is the time. Robert, I don't see things correcting or returning to "normal" for a VERY long time. It took years for a BOOM and now we are left with a completely different market. If you feel the need to sell now would be ideal because there are so many buyers lookig to dial in to that April 30th tax credit deadline. Also, there are many people here for vacations and activities right now with Arizona growth and tourism still being at peak. If you have questions on the true value, a liquid appraisal is advised. They are about $200.00 and can get you pretty dialed in to the revent comps and adjusted values of FORECLOSURE and SHORT SALE postings.
Please let me know if you need a resource for that. I am glad to help in any way!

Thank you!!

Kelli Michelle
REALTOR, CDPE
Century 21 All Star
602-579-0854
0 votes Thank Flag Link Tue Mar 2, 2010
this property, like all in the area, has plummeted terribly since this time. It would probably be in the mid 200 range now, to actually get it sold, and the area is riddled with foreclosures. The banks keep cutting foreclosure prices, so don't look for a bottom yet.

Funny, so many realtors said, "hold on, it won't drop that much, prices will come back up soon, etc" is this the new, "prices never go down"????

Read my phoenix real estate blog, my mathematical predictions for the market have not missed yet, and it will continue to drop the rest of this year for sure.
0 votes Thank Flag Link Tue Jul 15, 2008
It is time to sell. I have just encountered multiple offers for three different buyers in the 200k to 400k price range. If the home is priced correctly and is in great showing condition, your home will sell. By the way, it is a great buyers market now. Selection and opportunity have never been greater and mortgage rates are very favorable. What you perceive as a loss on the sell side can easily be regained on buy side.
Web Reference: http://besthomesaz.com/
0 votes Thank Flag Link Wed May 21, 2008
When everyone is Buying you should be selling. When everyone is selling, you should be buying. The models have been proven to work. If you can, I would wait
Web Reference: http://www.Brettnoel.com
0 votes Thank Flag Link Sun May 18, 2008
I would get a realistic current market number and take advantage of the selling season which is now and convert to cash!
0 votes Thank Flag Link Sun May 18, 2008
Robert, Have you ever purchased stock? Ever put a "sale" when a stock hits a certain point? I'm always amazed at my brethern to ask one to "hang-in there" when you've made a very tidy profit. You did not say how much you put down on the property and if you've been depreciating the unit. If you got in with little down your return on investment will be staggering. "Greed is NOT good!" Take you profit, go to cash, pick your next position slowly and with caution.
0 votes Thank Flag Link Thu Apr 24, 2008
So, you've experienced an annual return greater than the average. If you purchased a home today for 200K and in only 4 years it was worth twice as much, would you buy? Selling now takes hard work and there's a ton of competition in the valley. I live in the McDonald/Hayden area and have seen about the same that you have...

Your gain is substantial, whether you sell or not. If you have a renter that's covering your costs at the very least, perhaps holding it will be your best long-term decision.
0 votes Thank Flag Link Thu Apr 24, 2008
Whether you need to sell or want to sell seems like you already know what you want to do. Be realistic on the price when speaking with an agent. Are you running with a herd? Real estate has traditionally been a longer term investment. Is it your primary or investment property? Where do you want to go? What do you want to do with the money when you sell? purchased in 2002, held on for 6 years. That qualifies for long term? You need to be honest with yourself first and figure out what you really want to do. Make a decision.
0 votes Thank Flag Link Tue Apr 22, 2008
I'm hanging on to my real estate right now. This market wont last forever.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Tue Apr 22, 2008
funny
99% of my posts are
don't sell
not a good time to sell
almost always get the thumbs down from the realtors

the one time i say sell
so this guy can get some profit out of a risky market
the realtors say to hold on to it

lol

anyways

good luck
0 votes Thank Flag Link Tue Apr 1, 2008
Hi Robert,

Our friend Hi in Virginia seems to have all the answers. However, when one steps back and looks objectively at your situation you have to consider certain variables. Do you really NEED to sell now? Since this is not a primary residence of yours I would advise holding out for a while. The market will return. If you need or really want to sell now price it properly so that you will be attractive to buyers/investors. If you do not owe more than the $195k purchase price you noted above you will still make out well.
0 votes Thank Flag Link Tue Apr 1, 2008
sell
get your money now
"a bird in the hand is worth 2 in the bush"
and the price isn't going up anytime soon
you probably will not get 390K for it today
but get rid of it, make some profit
quick math
390 - 195 = 195
how long at your job does it take to make 195K

anyways

good luck
0 votes Thank Flag Link Mon Mar 31, 2008
Even if you sold for $350,000 quickly you have made a handsome profit, you didn't actually lose the feared 10% market drop. If you want to buy another home or don't need this one just sell it in the current market. Whatever you go to buy next will also be chaeper now than it was last year.
0 votes Thank Flag Link Mon Mar 31, 2008
I would only sell if you have to. The market will come back in the future. Have you considered a lease?h
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Tue Feb 19, 2008
Robert

You bought at a great price in a great location. Pricing throughout Scottsdale is trending down and will continue for probably another year. I watch market statistics in the area and do the numbers almost weekly. Just as you have seen your appraisal drop 40k in the last year and a half, the trend may continue til at least '08 given supply and demand. Would you hold on to a stock when you know it's trending down and will not change for at least over a year. It may be a good time to take some profit on this asset by selling, perform a 1031 tax deferred exchange on something you're buying at 75% of market or lower and then dig in for the future 5 years. The best investors always make their money when they buy, because they buy right and cover the majority of the risk. If you re-positioned the money to a multi-family dwelling like a 4 plex in that same basic area, you might even come up cash positive on a month to month basis.
0 votes Thank Flag Link Mon Oct 15, 2007
It is really going to depend what you want to do and what the time frame is for doing it. Have you spoke with a local Realtor in your area to assist you in your decision process.
0 votes Thank Flag Link Fri Oct 5, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Robert, one of the laws of appraising is to be the LAST condo built in your area! How MUCH new construction is going to be built in your area? If it is significant then prepare for further equity erosion. Sounds like your in the Phoenix area. We have some great Phoenix agents tell you the situation in that area.
0 votes Thank Flag Link Fri Oct 5, 2007
It seems like you have some good equity in the home that you want to protect. If you plan on selling now sellers who have the lowest priced home in their neighborhood are being rewared with a sale. It is not the time to test the market, you will just ad to the inventory. I think prices in many areas will continue to fall based on supply and demand in many areas. If you feel you could take the equity out of the home and make more money in a differant investment, sell now, if not be prepared to wait it out if inventories are high in your area.
Web Reference: http://www.MichaelRicks.com
0 votes Thank Flag Link Fri Oct 5, 2007
So, if you are renting right now, is the property sitting vacant? If so, are you planning on finding a renter? If the property sits vacant for 6 months or more and you have a mortgage, those payments start eating away at your profit margin pretty quickly. If you can hold onto it though and get it rented to cover those payments, I think it sounds like a great investment. As Real Estate Economist Elliot Pollack says, "The hot areas are going to be hot again," and Old Town Scottsdale will always be a desirable area.
Web Reference: http://www.DanMullarkey.com
0 votes Thank Flag Link Fri Oct 5, 2007
Robert, with real estate, like any investment, you must consider you short and long term goals, when making a selling decision. If you sold today, would you be a buyer tomorrow? If you sold today, would you sit on the sidelines until you thought the bottom had been reached?

Personally, the only reason I would advise selling today, due to the market conditions, is because you have identified a better investment that you consider "cheap" at these prices, and so you want to move your money to that other investment. Think of it like selling Intel to buy Apple. You still plan to be invested, but you think there's a different investment that you like better.

If you plan to sell and then sit on the sidelines, there's a reasonbly good chance that when you decide to re-enter the market, prices won't be any better then, than they are today. You see, to know we've hit the bottom, we'll have to be able to see that bottom in the rearview mirror, which means prices will have been going up for a while.

And all the while you are sitting on the sidelines, you lose many of the other advantages that being a property owner have. Tax advantages come immediately to mind.

One final thing to strongly consider, with regard to selling real estate, is that selling is not cheap. With commissions and escrow fees, it's going to cost more than a $7 trade at Scottrade. And then when you buy again, you'll pay escrow and mortgage fees. Will this new bottom really be that much lower to offset those additional costs?

So my advice would be, if you plan to stay invested, then sell if you want to buy something different/better, but hold if you were thinking of sitting on the sidelines.
Web Reference: http://blog.101bell.com
0 votes Thank Flag Link Fri Oct 5, 2007
Hold off if you can afford it.
0 votes Thank Flag Link Fri Oct 5, 2007
Robert, I just moved from the area and I know exactly where you are. In fact I lived in Chaparral Villas for a short time...the answer to your question...HOLD OUT. Real estate is cyclical, Scottsdale will always be a good market and the new development in time will only help your property (Water front, Safari, the W, Optima etc.) I say this all with the idea that if you can hold on to your property over the next 3 or 4 years. I also think the question that Erin poses is a good one.

http://www.buynsellohio.com
0 votes Thank Flag Link Fri Oct 5, 2007
Hi Robert,

What were your plans for the property in general? If you were not considering selling the condo to cash out, were you planning to keep it for the next 10 years? If cashing out was your motivation all along and this was a short term investment for you, perhaps now is a good time to do so. If you thought of this as more of a long term investment, and you do not have to sell, perhaps you should keep it. Real estate appreciates over time despite periods of decline. Real estate is one of the most popular investments is because of its consistent appreciation coupled with the some fantastic tax incentives.
0 votes Thank Flag Link Fri Oct 5, 2007
Erin Stumpf, Real Estate Pro in Sacramento, CA
MVP'08
Contact
Robert, that is the million dollar question, and since I don't have a crystal ball it is a hard one to answer. Let me say this, there are no indications we have seen the bottom of this downward cycle. Inventory of listed homes is still climbing and sales are still declining. Indications point to additional depreciation before we bottom out. Some of the experts in this industry are predicting this downward trend to be over by mid year 2008. Also, you need to know we are entering into the historical slow season of Ocotber through mid February. I hope this data will help you make your decision. I know if I didn't need to sell right now and could hold off I would.
0 votes Thank Flag Link Fri Oct 5, 2007
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