Bad market to buy and sell a house in?

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bwalling
Posts: 70
Joined: Thu Nov 25, 2010 1:04 pm

Bad market to buy and sell a house in?

Post by bwalling »

We're moving back to the state we used to live in. Got under contract Tuesday of last week, which means time to sell the current house. We can technically afford both homes and pay cash for both homes, though have no desire to do so. Given distancing and uncertainty, we're now starting to wonder whether it's best to back out and try this move another time.

If real estate bottoms out or something similar, we'll have a pretty painful experience - we'll have a bought a house at market rates and wind up holding onto another house or selling it in a terrible market at a terrible price.

It seems like the potential adverse outcomes are:

Wind up holding two houses for 1-2 years possibly. Costs are interest, taxes, insurance, and maintenance.
Wind up taking a loss on the house. Costs are however much of a hit that winds up being (10-30% of the house price)?

I don't know how to think about or evaluate this situation. Am I missing something in evaluating the potential risks?
GoldenFinch
Posts: 2268
Joined: Mon Nov 10, 2014 11:34 pm

Re: Bad market to buy and sell a house in?

Post by GoldenFinch »

Nobody knows how this will all shake out, but where I live they cancelled open houses yesterday. I read that some people are backing out of offers. I think you have to think about how much the decision either way will disrupt your life. If the market you are selling in is strong, it might not be much more difficult to sell.
earlyout
Posts: 1430
Joined: Tue Feb 20, 2007 5:24 pm

Re: Bad market to buy and sell a house in?

Post by earlyout »

I think the price of residential housing will be down after our current crisis is over. Let's say 20%. If you really want to move and don't mind losing the 20% on your current house, go ahead and move now. If it is not worth the 20% to move now, cancel the contract if you can and just stay put. I would not try to hold onto your current residence as a rental waiting for prices to come back.
fyre4ce
Posts: 953
Joined: Sun Aug 06, 2017 11:29 am

Re: Bad market to buy and sell a house in?

Post by fyre4ce »

earlyout wrote: Mon Mar 16, 2020 1:11 pm I think the price of residential housing will be down after our current crisis is over. Let's say 20%. If you really want to move and don't mind losing the 20% on your current house, go ahead and move now. If it is not worth the 20% to move now, cancel the contract if you can and just stay put. I would not try to hold onto your current residence as a rental waiting for prices to come back.
How do you know (or why do you think) prices will fall 20%? If anything I’d expect low interest rates to increase demand for houses and raise prices a bit.
The Broz
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Joined: Tue Feb 11, 2020 5:09 pm

Re: Bad market to buy and sell a house in?

Post by The Broz »

fyre4ce wrote: Mon Mar 16, 2020 1:36 pm
earlyout wrote: Mon Mar 16, 2020 1:11 pm I think the price of residential housing will be down after our current crisis is over. Let's say 20%. If you really want to move and don't mind losing the 20% on your current house, go ahead and move now. If it is not worth the 20% to move now, cancel the contract if you can and just stay put. I would not try to hold onto your current residence as a rental waiting for prices to come back.
How do you know (or why do you think) prices will fall 20%? If anything I’d expect low interest rates to increase demand for houses and raise prices a bit.
People who have been laid off will not be buying houses. I really do not get this jazz that interest rate cuts will spur some massive movement to buy. I don't believe there are whole swaths of the population out there renting because the mortgage is half a point higher (or whatever) than they would like it to be. Folks are seeing their investment accounts drop substantially and will start experiencing layoffs (or be worried about the threat of a layoff). It's not like that is remedied by a mortgage dropping from 3% to 2.85% or something.
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fortfun
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Re: Bad market to buy and sell a house in?

Post by fortfun »

I'd get your house sold first...
ballons
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Re: Bad market to buy and sell a house in?

Post by ballons »

fyre4ce wrote: Mon Mar 16, 2020 1:36 pm How do you know (or why do you think) prices will fall 20%? If anything I’d expect low interest rates to increase demand for houses and raise prices a bit.
Millions of boomers are retiring each year. "I better sell this home I really don't need anymore before it also crashes like my stocks did!" Also if the virus hits elderly bad, their children will be unloading these homes on to the market.
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