I have a friend used to say that there was a Seinfeld story line to cover every situation in life. I thought of that recently when talking to a Seller about their feeling that they had "lost money" in their home which they purchased 15 years ago and which still had its original mortgage.
In my Seller's mind the loss of value from 2006 to 2010, an amount of approximately 20% in his market felt like money out of his pocket. He was really disappointed that they had delayed making the decision to move from the big single family home into the condo that they hoped would better suit their empty nester lifestyle.
It's always hard to get people to grasp that the housing market is just like any market--very, very, immediate. When you go to sell your Oracle® stock its worth whatever it's selling for THAT DAY, it doesn't matter what it sold for in the past or what it might sell for in the future, the only thing that matters is today. Same thing with the family house, except the price is influenced up or down by condition and the horrible irony here is that poor condition of property creates more downward pressure on home values than good condition creates an upward trend in home value.
Good property condition makes your home more marketable and makes it sell faster but you do not get a dollar for dollar return for the upgrades that you do prior to putting your home on the market.
So, what's the take away for my Seller?
Had he sold in the fever pitched market of a few years ago he would have also been buying in that same market. Then his situation would have been all together different and he may very well have been sitting on a property with an upside down mortgage. As it is he will be selling his home after seeing property values nearly triple and then moderate a bit, and he will being buying in a market that has seen some serious price correction. While my Seller may feel like he is selling low...the truth is that he is buying low; he is going to make a lot on money on the sale of his home and he's going to buy a great condo for way, way less than he would have if he had made his purchase when he first contemplated a change.
So, which Seinfeld episode fits this situation?
The one where a series of ridiculous events cause Jerry to believe that he's always going to stay even. Sell low, maybe but you'll also be buying low, but really it's not low, it's the current market.