Making the Most of a Bear Market: Tips for Handling Your Home
What happens when you come across the perfect time in your life to list a home—and find that you’re looking at a bear market in real estate?
The challenge might seem insurmountable at first. But what you know about real estate can help guide you and boost your confidence even in adverse market conditions.
And while it’s tempting to believe that your area will always have a positive market in its favor, consider this: new home sales have fallen 22 percent between November 2017 and September 2018. Understanding how to move forward will require knowing a little more about your market, a little more about how real estate works, and how to find a real estate group that’s navigated these difficult markets before.
1. Keep an Eye on the Real Estate Market
You’re not always going to be a real estate expert. We get it. The reason you work with high-quality firms in the first place is that you’re busy and you want to outsource the work to a team of experts that can handle all of the thinking for you.
Even so, it doesn’t hurt to keep an eye on the long-term trends of the market. For example, NerdWallet.com has provided a list of housing trends to watch as 2019 develops, giving you a preview of what kinds of headlines to watch for.
You can also keep tabs on the market by watching individual properties. If you have “house fever,” you can check up on some of your favorite dream homes in the area and watch their prices. Do the prices go down? Does the house stay on the market for longer than you expect? Or does the house get snatched up right away?
Another way to keep tabs on the market is to watch home construction stocks. Although these individual companies don’t always correlate with the real estate market, you’ll be able to spot trends by keeping an eye on the health of new home construction stocks. For example, a recent article in MarketWatch found that these stocks were down 40% on average from early-2018 highs.
Keep in mind, however, that like any stock sector, these stocks can be hit by the overall economy, which means you’ll have to pay attention to the context of the overall financial sector to get a true feel for home construction stocks and their performance.
2. Make the Most of Your Neighborhood and Upgrade
You can’t control your neighborhood—for good or ill. But you can control the context of your home as it appears in your neighborhood. Most importantly, you can use various strategies to differentiate your home from everything else on the block, giving it a feeling of exclusivity and value.
We know what you’re thinking—your house looks like every other house on your street. However, you can make simple tweaks to give your home an advantage. Investopedia notes that even these simple tweaks—such as landscaping, higher grade windows, or an updated roof—can help convince prospective buyers that they won’t have to do as much work on the home when they purchase it.
These investments have a two-fold effect. First, they will result in your home being more valuable in the long run. Second, they’ll give you more to enjoy while you stay in the home.
3. Examine Your Curb Appeal
Curb appeal, curb appeal, curb appeal. You’ve heard it a million times. But what does “curb appeal” really mean, and how will it help you make a sale in the middle of a bear market in local housing?
There are a few ways to boost curb appeal that you might not have considered, including:
- Landscaping and tree cover. Think a tree doesn’t do much for your property? You’d be surprised. One study showed that home values can increase as much as 9% thanks to a well-positioned tree or adequate landscaping. For hedges, the property value can increase by 4% thanks to well-crafted hedges with neighbors, which influence the sense of privacy you feel on a lot.
- A better garage. When you consider just how important the garage is to daily life, perhaps it’s not such a surprise that it has such a dramatic impact on the home’s value. Remember that because garage doors take up so much visual real estate that investing in a high-quality door will have a dramatic effect on the overall curb appeal of the home.
- Patio and outdoor space. Having a great outdoor patio may not do much to the inside of a home, but its effect on the overall property value can be disproportionate to its cost. Patios can add 10% or more value to a property.
4. View Your Home from the Perspective of a Buyer
If you’re listing a home—or planning to move during a bear market—then it’s especially important to look at your home from a third-party perspective.
Consider this: you’ve had time to make memories in your home. You’ve had great experiences in it. You’ve enjoyed warm respites from winter. You’ve enjoyed quiet evenings at home. Parties with friends. Family get-togethers.
The problem: your prospective buyer knows none of this. All they know is that first impression when they cross the threshold.
That’s why it’s so important that if you’re going to list your home, you try to give yourself an honest appraisal of what you’re selling. Not only do you want to avoid deluding yourself into thinking you should sell the house for more than you can, but you want to make note of the improvements that need to be made. Sometimes these improvements will be simple and small. Sometimes they might be far more resource-intensive. But when you’re honest about the state of your home, you stand a far better chance of making it look better from the buyer’s perspective.
5. Know the Pricing in Your Neighborhood and Region
Remember Tip #1? Keeping an eye on the real estate market is about knowing more than when it’s simply time to sell. It’s also about having a clear idea of what you should expect to get for your home once it is on the market.
It’s tempting to look at the market and get a feeling for what you should expect to receive. When you specifically know the prices in your neighborhood and region, you’ll have a far more accurate barometer of what to expect even in a bear market. You’ll know the context for what a “lowball” offer is and what the difference is between that and a fair price.
If you work with an effective real estate group, that shouldn’t matter so much. But it will help you remain informed about what your house can command in a given market, even before you decide to reach out to a real estate group.
6. Effective Marketing
Even in a bear market, some people need homes. Some people need to sell their homes. Just because real estate activity might be low relative to other times doesn’t mean that you won’t be able to see movement in your home.
That’s why it’s so important to work with a high-quality real estate group that understands how to effectively market, stage, and present your home. Each of these steps is critical for maximizing value during a booming real estate period, just as it is for getting the best purchase price possible during a slow period. Even the most pessimistic forecasters never see prices falling so low that effective marketing can’t make a difference.
7. Options for Delaying the Sale
Approach an experienced real estate group and you’ll find that you don’t necessarily have to sell a home right away to get your move going. There may be a variety of options available for you that you hadn’t considered.
When a truly poor market for real estate hits, it can feel a bit like being trapped in your own home. But it doesn’t have to feel that way. If you know your options, such as waiting, renting, or shopping the market, you’ll stand a far greater chance of making the right decisions even when things aren’t going well in the real estate sector.
The key here: don’t avoid talking to a qualified real estate group just because you’re not sure if you’re going to like the answer. You may be pleasantly surprised to find out there are all sorts of options.
Handling the Down Times
With a high-quality real estate group in your corner, there’s no limit to what you can accomplish with your next move. It’s important not to hide away when prices are low; instead, recognize that this time can be an opportunity to buy, as well. That’s what makes real estate such a special industry to work in. As long as you work with a real estate group you trust, you’ll find out there are plenty of things you can do to maximize your chances at landing the right deal for you.