Aug

4

Why Sell in Today’s Market?

Filed Under News, Real Estate |

why-sell-in-this-marketOn the surface, it’s a very logical question: “Why would anyone willingly sell a home in a down market?” If the typical news story is any indication, it seems that the only reason to sell these days is out of financial desperation - selling at a potential loss in order to hastily make ends meet. For the large majority of the sellers I’ve met these days, however, that couldn’t be further from the truth.

Recently, I took a single woman looking to purchase her first condo on a home tour. We saw thirteen two bedroom, two bath condos across several Chicago neighborhoods from the West Loop up through Lakeview. I immediately noticed a pattern. The second bedroom in every apartment was a nursery or child’s room. Moreover, about a third of the apartments included a bassinet for a newborn in the master bedroom. Each of these couples was selling because they had outgrown their home!

This got me thinking about who is selling their home in this market and why. So, I sat down with the list of 69 properties my team and I have listed or sold this year, and I categorized them by the reason behind each sale. Below is the breakdown.

chicago-home-seller-reasons1

81% - Moved due to changes in family situation

* Marriage (4%)

* Need more room for kids (30%), (about half moving to suburbs and half moving within Chicago)

* Need more room for dogs (1.5%)

* Kids are gone and/or downsizing (14%)

* Moving out of state for jobs and/or to be closer to family (26%)

* Divorce (1.5%)

* Death (4%)

7% - Developers

* Developer selling new construction (7%)

4.5% - Financial reasons

* Short sale (1.5%)

* Foreclosure (1.5%)

* Liquidating investment property (1.5%)

7% - Wanted to make a change / Discretionary

* Selling now because the condo they bought preconstruction is finally ready (5.5%)

* Selling because they bought something else they like better (1.5%)

(figures are rounded)

As you can see, contrary to the common perception, only a small number of the sellers we represent are actually selling for financial reasons. The market may be down, but since many are selling so that they can buy a new home, they’re simply rolling their investments over into a new property. Even if they have to sell at a discount, they’ll be buying at a discount as well. Hence, their personal decisions can remain largely personal.

I’m not claiming my sellers are representative of the whole market (they’re not). But, I do want to show that while it’s a new market, many of the old rules are still around. Certainly when it comes to the sellers I work with, they’re still tailoring their homes to their lives, not merely their finances.


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Comments

  • SeanCarp
    Jennifer - This is a great example of the power of tracking your results. Good for you to sit down and explore the "why"
    behind the results. Not only will this be helpful to your future transactions but also to you and your team for marketing purposes, expense control and future planning.

    Real estate remains and emotional decision for most buyers and sellers wrapped around a logical reason. Your graph and results show that once the logic has been determined, you and your team are the people to help guide the sellers through the emotional part of the process. Good job.

    Sean
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