The Problem with Move-Up Housing
Suppose you have your home on the market, and it’s priced at $600,000-$1Million. It’s not selling. You think you’ve done everything you can. Why isn’t it selling? Is it your agent? Probably not.
The last few years have seen a significant out-migration of people from the San Diego area (here’s a Union - Tribune article for you to read: http://www.sandiegouniontribune.com/news/2016/mar/24/net-migration-census/ ).
Most of these people are moving to gain a foothold on a better life in a less-expensive environment. Colorado has been the destination for lots of these folk, as have Oregon and Washington, to name a few. Many of the people moving out are people like you. They had a home in the same price range as you, and they want to sell their homes and move somewhere that it’s easier for them economically. Some are looking to stay, of course, but they want to downsize and move, either further out (think Pine Valley, Fallbrook, Valley Center, Temecula), or simply reduce the size of their 3,500 square foot home to 1,800. Others, of course, want to move up, but they are fewer. So there are people leaving, and the net migration is OUT. People are looking to sell homes similar to yours so that they CAN move. The largest part of the “buying pool” wants a home less expensive than yours, because they are just starting out, or they are trying to move from a condo or rental into their first real house, or they want, like you, to downsize and/or move out of the area. It seems like everyone wants that “First real house,” and fewer and fewer people want your “move up house.”
I have bad news. The exodus of people from San Diego County is not going to change. The population is undergoing a major shift from more people coming in than want to leave, to fewer people who will live here in the future. This means a couple things:
1.It’s MUCH harder to sell move-up housing, because you are competing with other sellers just like you, and the competition is fierce.
2.If you plan to sell and stay here, the differential between what you will get for your house and what you will have to pay for the “downsized house” is much less than it used to be, since the house you want is what everyone else wants, and the house you’re selling is much less popular.
So...what to do? Well, the first thing you need to do is to get your head around the changes taking place, because they are not going away any time soon. The San Diego area is undergoing major changes. These changes are going to continue. Next, you need to take stock of your own situation. If you need or want to move, you have to prepare yourself for the realities of what you will get out of your home, and what you’ll have to put into the next one when you buy it.
Next, you’ll need to look hard at how you price your home. Remember that there is more buyer competition at the lowest end of the market, and more seller competition at the higher end. In other words, if you get an offer on your property, and it’s not what you want, negotiate! That may be the one offer you get, until you reduce your price even more. In addition, we’ve found over the years that your first offer is nearly always your best offer. It’s not 100%, but it’s close.
Finally, don’t be led astray by the idea that if you “fix up” your home (add a pool, re-do the kitchen, etc.), you’ll get a lot more money. That is not necessarily the case, because the new buyer wants your home for the lowest dollar amount he can get it, and he’ll have no qualms about setting your property over against other properties he’s looked at to see which costs him the least.
You may also find that, instead of multiple offers on your property, the buyer will offer on multiple properties at the same time, to see which one responds at the price HE wants to pay..
Finally, BE PATIENT. The part of the market you’re in is a bit of a tough sell right now, but if you price right, listen to your agent, and adjust your expectations to the market, you will sell your home. For sure.