Defining value and motivation in a DOWN market....
‘I know that the house is worth more than that, but what choice do we have?’
This is a refrain I’ve been hearing from so many clients, friends, people at the next table at restaurants, etc lately. I know that not everywhere in my Chicagoland universe is having this problem, but it’s very much the reality in the circles in which I live and currently work. I say ‘currently’ because next week a new buyer or seller might come along that is seeking results in a neighborhood or property category that IS moving right along. This nuance of the market around here is part of what makes these conversations so perplexing and brow-furrowing for sellers. There isn't just ONE reason for it, the whole market hasn’t crashed like it did 10 years ago, there’s not a new impending crisis or a recurrent one, like hurricanes or fires, that’s driving buyers away. In many cases, it’s more that the buyers don’t exist in the first place, so that’s a particularly thorny challenge. Interest rates are super low, construction/renovation costs are super high, so if you’re a buyer, it’s a great time to buy. Whatever the reason for the lagging sales in some sectors, though, perception creates reality, and therefore a momentum against selling, and it can’t be denied. All that is left to do is take a moment to gain a little perspective into WHY you’re selling and what you actually need to get out of the transaction.
I’ll put a personal spin on it - we have a hard-to-sell home in a hard-to-sell market. When we listed it originally, I said to anyone that asked, ‘it will never sell - I know it won’t’, and people said I was crazy, they said of course it will sell. It will be 3 years on the market in this coming April. I have a creepily accurate sixth sense, and I am trying t get better at always listening to it, and not letting people talk me out of it, but that’s another topic for another day. When we were following along with the market and future promises that we’d been accustomed to accept as a given, we even bought a lot to build our dream house on - in our current neighborhood. Along the way, we decided to bump up our building power by investing in a flip in a ‘can’t miss’ location. Fast forward to today, and all three are for sale, totalling nearly 5 years of market time. That obviously causes a person to re-evaluate a LOT. We accepted the fact that our retirement future can’t depend on us owning a dream house in this location, so over time i’ve mentally walked away from the dream of having a dream house. It still makes me want to throw a chair through a window quite often, because I can’t fathom being an architect and being ok with not living at least part of my lifetime in a house that expresses some of my deepest design desires. Personal expression is something I think everyone needs more of in their lives, and creative types especially. (Maybe I should have chosen a creative career that wasn’t so incredible expensive to create with) Had we sold right away, I’d be living in that house by now, the stresses of construction and inspectors already beginning to fade into memory, and that space being taken over by my plans for the first round of changes i’d be making to the house. Instead, there is little sleep, extreme financial stress, a never-ending sense of dread and shackles and hopelessness. The investment house weighs heavily in particular, because it means that nothing in our life can move until it does, and the phone hardly rings, despite busy open houses and glowing reviews from neighbors and all who visit. It feels like having a massive cat allergy, yet having been given a gorgeous cat that you must now re-home. Everyone coos and blabbers all over it, saying how lovely and cute it is and what a wonderful thing it must be for you to own it, but that they of course are only dog people and aren't interested. Meanwhile the cat senses it isn’t wanted and is confused as to why, and everyone involved feels very much in a gloomy place, despite all being wonderful creatures and all worthy of happiness and belonging. Even as I write this, my phone dinged as a showing was scheduled for that property, and now it’s just been cancelled. I have no words.
So for my family, we have to look at what we valued about owning and selling these properties, and since a move away isn't dictated by outside factors, we have to change our goals for each transaction, and come to terms with dreams dashed due to the financial losses and time wasted. We have to just stay put, tread water, and accept that this is not the time or the place for our particular dreams. The best hope is that when the day comes for actually moving away to somewhere, that we are able financially to do so, and don’t waste away here just because of market factors. For other sellers, though, they have actually moved away, they don’t have the choice of just staying and melting into place. In that situation, the conversations involve just as much stress, sleepless nights, and the shackled feeling I mentioned before. I was discussing this with a neighbor that has moved quite a lot in the last 10 years, and she recounted each financial loss with the perspective of ‘at least we were able to move on, though.’ She understood too well that feeling of the time when you are still pinned down, still waiting on that showing, still holding out hope that you’ll get the profit that the charmed real estate successes of TV are promising you that you’ll get. That last piece there is the hook I want to get at here - many people looking to sell are fully immersed in so many promises of modern aspirational American life, and the general gratification we all experience moment to moment from our phones, Starbucks, DoorDash, Amazon, etc. While it’s true that often a major life adjustment may have to happen if you take a loss on a home sale, and those may be very stressful, there is also undeniable forward motion. Just because we go backward financially it does not mean that we go backward in life. I asked a client if their family was happy in their new location, putting aside what was still hanging on back here, and without hesitation the answer was ‘YES! We love it!’ What a lovely thing to hear! Even with me struggling daily with the loss of working on my own home, I’ve been able to use the copious amount of free time to try other things. I can see, also, that I might not have been happy with the results had we started 3 years ago, i’m not sure we would have had enough time, enough money, enough experience, or even been able to find a contractor willing to build what we came up with. Because things are moving in super-slow motion right now, though, I can’t fully say for sure yet what the outcome of all of this will be for me personally just yet. What I have learned from this stupid market situation, though, is that if we confront the challenges and then really get serious with ourselves about what helps us sleep at night, the answer seems to always boil down to freedom, not money. People are happier when they DO move on, even with losses, as opposed to how they feel when they are embroiled in the fight. Fighting real estate prices is, after all, a fight with a nonexistent enemy, and that will drive you mad really quickly. I’m not saying everyone should just drop all their prices and give everything away, but I am saying that believing in the market promises of another time and place will not make you happy. Looking at moving as not a fight but new set of choices does go a long way towards making you feel less like a victim, though, and that’s a start.
If it’s not obvious, I have been writing about real estate and design as tool to express how I feel about a lot of the issues that we humans are confronted with where I live. I do feel we are too insulated from risk, choice, and individualism. There is a sense that if you aren't continually aspiring and adding to your massive pile of protections from nature and effort, that you are going to struggle and suffer and be miserable. I fully admit that that was a pill I swallowed for sure, without thinking, but not thinking is a terrible way to go about life. I mean, when you die, if you die with a giant pile of cash, what is the point of that? If you work hard for resources that you need to reach in order to finance broader ‘life’ goals, that’s one thing, and yes, financial success on certain levels IS required to do a lot of things that make people feel accomplished, educated, challenged, and fulfilled, BUT, there is a point at which we also find ourselves sacrificing a myriad of options for fulfillment in the laser-focused struggle for maintaining a level of perceived comfort that might not be needed. We just need to take a step back and re-evaluate from time to time, even if it feels like crap at first to confront yourself about choices you’re making.