Buyer's Market In City: To Wait or Not to Wait to Sell

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Coltrane75
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Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

Hi all,

I own a one bedroom condominium in the center of a coastal eastern city. Like most urban cores the real estate market is pretty weak for sellers. After attempting to sell last year, including 2 price drops, there were no takers. This year so far the weakness has continued.

This is likely the inverse of what is going on in the suburbs for buyers.

Given that I don't need to sell until as late as 2023; would it be better to simply wait to hit the market for a couple of years versus constantly keeping it on the market and lowering the price. The market may be stronger in a couple of years.
e5116
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by e5116 »

Are you currently living in the condo? Can you rent it out instead? Perhaps the rental market is more robust where you are located.

It really depends on your need to move out vs. financial considerations. Sometimes, finances aren't the only factor and people are willing to take less to move on with life. Sounds like you're not in a rush though. I'd probably pull it from the market in that case and see if things change (they may or may not...).
Last edited by e5116 on Wed Apr 21, 2021 9:33 am, edited 1 time in total.
chassis
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by chassis »

I agree with your sentiment about waiting a few years.

Does the unit have assigned covered parking or a garage? This is a dealbreaker for some people, if quality parking is not available.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

e5116 wrote: Wed Apr 21, 2021 9:32 am Are you currently living in the condo? Can you rent it out instead? Perhaps the rental market is more robust where you are located.

It really depends on your need to move out vs. financial considerations. Sometimes, finances aren't the only factor and people are willing to take less to move on with life. Sounds like you're not in a rush though. I'd probably pull it from the market in that case and see if things change (they may or may not...).
Thanks for the reply. I live in the unit. Unfortunately the rental market is also very weak.
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Coltrane75
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

chassis wrote: Wed Apr 21, 2021 9:33 am I agree with your sentiment about waiting a few years.

Does the unit have assigned covered parking or a garage? This is a dealbreaker for some people, if quality parking is not available.
There is attached parking available for rent.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (real estate).
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Yarlonkol12 »

I guess it depends on the city. If it’s a city people want to live in, sure, maybe prices will come back sometime in the future. However, I think you have to discount the premium on being close to office buildings, I don’t see that coming back personally
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Watty »

Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Valuethinker »

Coltrane75 wrote: Wed Apr 21, 2021 9:28 am Hi all,

I own a one bedroom condominium in the center of a coastal eastern city. Like most urban cores the real estate market is pretty weak for sellers. After attempting to sell last year, including 2 price drops, there were no takers. This year so far the weakness has continued.

This is likely the inverse of what is going on in the suburbs for buyers.

Given that I don't need to sell until as late as 2023; would it be better to simply wait to hit the market for a couple of years versus constantly keeping it on the market and lowering the price. The market may be stronger in a couple of years.
It seems to be a point of maximum pessimism regarding the future of city centres.

In a year's time, vaccinations will be at a very high level. If so, the economies of western countries should be in far better shape. Much of the city "buzz" should have resumed. Maybe people will have moved out of city centres, but maybe not. Companies will still have offices, there will still be stores and restaurants, museums and galleries and live theatre, opera, concert music.

Whilst I believe Covid-19 has probably pushed 20 years of social trends into 1-2 - for things like working from home more days of the week - I think human beings are rather more elastic than that - they bounce back. They seek normalcy and a return to old patterns.

This week stores opened in the UK. There were queues round the block for Primark (one of Europe's largest cheap-and-disposable fashion store chains). The store has not died in this, and neither will the pub or the nightclub.

I'd wait a year and see how things go.
Last edited by Valuethinker on Wed Apr 21, 2021 10:19 am, edited 2 times in total.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Valuethinker »

tiburblium wrote: Wed Apr 21, 2021 10:00 am I guess it depends on the city. If it’s a city people want to live in, sure, maybe prices will come back sometime in the future. However, I think you have to discount the premium on being close to office buildings, I don’t see that coming back personally
I think people will still commute, albeit fewer days a week.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Cycle »

Obviously any housing with a 90+ walk score will be extremely attractive to buyers with multiple brain cells... But there is ambiguity right now as to the vibrancy of downtowns AND as to the future interest rates. I think the vibrancy will return as more housing goes in downtown and People don't need to wear masks.

We have a 2br/1ba condo that we are deciding on whether to list or rent in a month. We are moving to a bigger place a block away.
I've been a landlord before, so renting doesn't scare us.

Our downtown remains the most expensive place to live per sqft, despite everything being boarded up due to Chauvin trial. In a few years the last remaining surface lots will be converted into housing, at which point there will be a supply constraint with housing downtown. There are about ten more easy sites to develop.

I'm torn as to rent it or list it.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Valuethinker »

Coltrane75 wrote: Wed Apr 21, 2021 10:13 am
Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
Interesting, I was thinking exactly the opposite.

If you take your money off the table, and go buy a place you really want to live in - then it's better done quickly.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by MishkaWorries »

Valuethinker wrote: Wed Apr 21, 2021 10:36 am
Coltrane75 wrote: Wed Apr 21, 2021 10:13 am
Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
Interesting, I was thinking exactly the opposite.

If you take your money off the table, and go buy a place you really want to live in - then it's better done quickly.
Yes. What is the alternative? Why are you trying to sell 2 years in advance of a move? How critical is you you leave in 2023?
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by hoofaman »

Cycle wrote: Wed Apr 21, 2021 10:28 am Obviously any housing with a 90+ walk score will be extremely attractive to buyers with multiple brain cells
I guess the walk scores must be based on outdated metrics. I live in the suburbs and we walk to everything that matters to us: Parks, playgrounds, nature trails, bike trails. With grocery delivery, amazon, and fulltime WFH the car is just an optional thing to get us to recreational activities. To be fair I’m not a bar/nightclub person
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Cycle »

From what I've seen, as I've been watching the downtown market here for the last year, the 1bedrooms are going for very low prices.

The 2 bedrooms in good buildings are selling quickly, but they haven't had the massive appreciation of single family homes. The 3brs are rediculously expensive still.

I bought my 2br/1ba condo for $173k in 2019. I should be able to get $225k for it. So that's ~25% appreciation. SFHs have had like 50-75% appreciation here over the same period.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

MishkaWorries wrote: Wed Apr 21, 2021 10:43 am Yes. What is the alternative? Why are you trying to sell 2 years in advance of a move? How critical is you you leave in 2023?
That's a good question. We're having a baby in August and would like more room, but we can handle a 1br and a baby for a couple more years if need be.

I guess there is fear that things could be worse in 2 years if we wait to sell.

But there is so much uncertainty about everything its hard to make a decision.

Additionally, the suburban SFH market is horrible for buyers so that could be another reason to not sell now and wait.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

Valuethinker wrote: Wed Apr 21, 2021 10:36 am
Coltrane75 wrote: Wed Apr 21, 2021 10:13 am
Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
Interesting, I was thinking exactly the opposite.

If you take your money off the table, and go buy a place you really want to live in - then it's better done quickly.
We wouldn't necessary turn right around and buy a home after selling because the SFH suburban market is in a frenzy now. Sorry to be so back and forth about this. We're dealing with the dichotomy of a super hot SFH suburban market and a cool urban condo market along with the fog of uncertainty about the next 1-2 years from covid.

So many articles and news pieces making all kind of fantastical claims one way or another doesn't ease the thinking either.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Wellfleet »

I think this is a "sleep well at night" decision for you. I think we see a snapback to the city for young people at least, but who knows. I'm looking forward to enjoying some urban amenities and go to the office once a week.

Raising a baby/toddler in the city is great until you need to make decisions about schooling and that is 5 years off for you. I'd wait if finances and quality of life are not pressing.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by hi_there »

Valuethinker wrote: Wed Apr 21, 2021 10:16 am
tiburblium wrote: Wed Apr 21, 2021 10:00 am I guess it depends on the city. If it’s a city people want to live in, sure, maybe prices will come back sometime in the future. However, I think you have to discount the premium on being close to office buildings, I don’t see that coming back personally
I think people will still commute, albeit fewer days a week.
"People" are not a homogenous block though. Many will be back in the office, but many won't. If 15% or 20% fewer people have to commute, that's a huge demand loss for commercial real estate and convenient residential real estate. Fewer commute days also means people will tolerate further commutes and pay lower convenience premium.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Cycle »

hoofaman wrote: Wed Apr 21, 2021 10:52 am
Cycle wrote: Wed Apr 21, 2021 10:28 am Obviously any housing with a 90+ walk score will be extremely attractive to buyers with multiple brain cells
I guess the walk scores must be based on outdated metrics. I live in the suburbs and we walk to everything that matters to us: Parks, playgrounds, nature trails, bike trails. With grocery delivery, amazon, and fulltime WFH the car is just an optional thing to get us to recreational activities. To be fair I’m not a bar/nightclub person
Do you have any neighbors that don't own a car?

How about less than one car per working adult?

Obviously if they were optional, people wouldn't have them. For example in my midwestern city neighborhood only 50% of households have a car, let alone two of more.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by rascott »

Young(er) people are gonna be your target buyers, and they'll be eager to return to the city once vibrant life returns to there. To think that downtown Boston (one of the nicest cities I've visited) won't see a bounce back in coming years is silly..... regardless of what the future of work looks like.

For years I had friends that lived in downtown areas and worked in the burbs.....as that's where they wanted to be for socializing.

I would wait.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by sometalk »

Coltrane75 wrote: Wed Apr 21, 2021 10:13 am
Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
Which part of the Boston area? Market for condo's is anything but weak at the moment. I guess specific locality matters, but our street (on the other side of the Charles) has seen multiple condo's disappear before the first set of open houses (property comes onto the market on a Wednesday, and is taken off before Saturday). Most of them are 2 or 3 bedroom places. Low interest rate, low inventory (and the tech scene + stock market doing what it is doing), is predominantly driving the market.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

sometalk wrote: Wed Apr 21, 2021 11:46 am
Coltrane75 wrote: Wed Apr 21, 2021 10:13 am
Watty wrote: Wed Apr 21, 2021 10:09 am
Coltrane75 wrote: Wed Apr 21, 2021 9:28 am The market may be stronger in a couple of years.
I would not count on that.

I do not have a crystal ball but in a couple of years mortgage rates could be a lot higher and potential buyers could be looking at 6%+ mortgage which would make your place a lot less affordable. It was not that long ago that a 6% mortgage was actually pretty typical.

Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
That's a good point. BTW, the city in question is Boston. There could be other unanticipated events that negatively impact the RE market. I think I'm going to move forward and sell in line with a comparable in my building that sold in the winter.
Which part of the Boston area? Market for condo's is anything but weak at the moment. I guess specific locality matters, but our street (on the other side of the Charles) has seen multiple condo's disappear before the first set of open houses (property comes onto the market on a Wednesday, and is taken off before Saturday). Most of them are 2 or 3 bedroom places. Low interest rate, low inventory (and the tech scene + stock market doing what it is doing), is predominantly driving the market.
I'm a first floor 1Br near the leather district/chinatown.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by LittleStarSF »

hoofaman wrote: Wed Apr 21, 2021 10:52 am
Cycle wrote: Wed Apr 21, 2021 10:28 am Obviously any housing with a 90+ walk score will be extremely attractive to buyers with multiple brain cells
I guess the walk scores must be based on outdated metrics. I live in the suburbs and we walk to everything that matters to us: Parks, playgrounds, nature trails, bike trails. With grocery delivery, amazon, and fulltime WFH the car is just an optional thing to get us to recreational activities. To be fair I’m not a bar/nightclub person
Do your deliveries arrive on foot or by car? Are you able to get to groceries, household supplies, banking, doctors, dentists, schools, jobs, restaurants, movie theaters, music venues...in addition to parks, playgrounds, & nature, by walking, even if you opt to have things delivered?
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by LittleStarSF »

Watty wrote: Wed Apr 21, 2021 10:09 am Since you need to sell it by 2023 I would go on and sell it now at whatever price it will actually sell for now. If you are in a large building it is likely that some of the condos in the building have actually sold recently. That is the real market price.
+1
In a building that has units regularly for sale it's easy to see how much they are selling for and decide if that price is worth it to you to sell now.
Coltrane75 wrote: Wed Apr 21, 2021 11:06 am So many articles and news pieces making all kind of fantastical claims one way or another doesn't ease the thinking either.
People who have moved because of covid have already done so by now, a year in. I see headlines that sound sensational and when I read the article there is maybe a personal story or two or some very average looking data that doesn't really support the headline. Housing markets are tight because there's a massive undersupply of housing. Everywhere. I doubt that will be remedied in the next two years.

Another way to approach this might be to find a new home where you want to move to first and then do a HELOC or a bridge loan. It could take a year for you to find something and have an offer accepted. Then you can sell (or rent) the condo once you have a new place to live.

I personally would want to avoid the stress of home buying/selling/moving at the same time as having a baby, so if it were me I would see if I could find something in May or June and then put a pause on the whole thing from July to January.
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Re: Buyer's Market In City: To Wait or Not to Wait to Sell

Post by Coltrane75 »

lindsayinsf wrote: Wed Apr 21, 2021 4:22 pm I personally would want to avoid the stress of home buying/selling/moving at the same time as having a baby, so if it were me I would see if I could find something in May or June and then put a pause on the whole thing from July to January.
Thanks for the response. Having the baby is yet another complication to our decision.

A bridge loan and buying first is really not going to be possible after discussing that with our bank; the debt ratio and bridge loan terms are too constrictive.
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