Getting The Right Answers On Buying Or Selling Starts With The Right Questions

Getting The Right Answers On
Buying Or Selling Starts With
The Right Questions

Like so many of life's big decisions, the right answers about buying or selling a home derive from asking the right questions. So when people ask me if now is the right time to buy or sell, I usually recommend setting aside the immediate or short-term considerations involved in this debate and first framing the question in the context of long-term goals. After all, homeownership, as we've all been reminded, is a long-term proposition.

And long-term, it still appears to pay off for most Chicagoans. Earlier this month Crain's Chicago Business reported that, "despite double-digit drops in the bust of recent years," a number of Chicago-area neighborhoods and communities still experienced healthy price increases over the 10-year period from 2000 to 2010. Citing data from Fiserv Inc., the article reported increases in newly gentrified areas like Uptown/Andersonville (+39.3%) as well as more established neighborhoods like the Gold Coast (+33.2%). These figures might come as a surprise given the housing crisis, but they average out to between 3% and 4% per year, which is about the historical norm for annual home-price appreciation going back decades.

Another long-term factor buyers and sellers must consider is borrowing costs. No one knows exactly where interest rates will be in a few years, but a decade ago the cost of money was almost double what it is today.

Not to be overlooked are the lifestyle considerations that factor into buying, selling or standing pat. These include things like growing families, schools and retirement. Sometimes, short-term financial factors (like today's prices) outweigh these issues, but other times they don't. For example, a buyer who wants to move into a specific school district because their child is starting kindergarten may be less concerned that prices could decline for another year or two before starting to recover. Likewise, a seller nearing retirement may decide they would rather sell now and retire with less equity, than wait an indeterminate amount of time until their home equity approaches pre-crash levels.

For these individuals, now is the right time to buy or sell. I'm here to help you ask and answer the questions that will determine if the time is right for you. Please feel free to call on me anytime. And remember, I always appreciate your referrals.

Dave Straub
@properties
773.255.3180