The real title this week is, “Selling Real Estate in a White-Hot Market”.
Future topics include:
- Real Estate (in general) in a White-Hot Market
- How to Handle Real Estate as an Asset in Any Market
- Renting versus Buying in a White-Hot Real Estate Market
ALL of these topics have come up in conversations with friends and clients over the past year, even more so in the past five months. There is no question that real estate – especially around major cities like New York, Chicago, Philadelphia, Raleigh/Durham, and Atlanta – is sizzling hot. Even cities such as Atlanta where there are residential areas inside of a sprawling city, those “suburban feel” areas are also on fire.
There are different as well as similar reasons for the degree of “hotness” in the above-mentioned areas among other cities. Namely,
- The pandemic leading to major work/life decisions involving style and location of homes.
- Movement away from certain major urban centers (is this temporary or permanent?)
- Companies evolving to allowing employees and contractors to work from home, hence the need for more spacious residences.
- Super-huge companies designating certain cities as corporate hubs or “lead sites” (think: Apple, Amazon, IBM)
- Availability of mass transportation and room for transportation growth.
- Quality of life.
- Quality and cost of all levels of education.
- (for fun) the number of near-by Costco outlets.
Narrowing down to the topic of SELLING real estate in a white-hot market, the inevitable question has become, “What do I do next, if I am able to take advantage of selling my home in this market?” Possible answers (in the form of further questions) range from,
- Do I buy another house in the meantime to capture rental income?
- Do I refrain from selling now in order to capture all the upside that I can?
- (If moving for work reasons) Do I rent in my new town or city until the real estate market cools down?
- If I am able, do I hold on to my current home as an appreciating asset, rent it out AND buy or rent a new home in the new area?
- How big of a mortgage should I take, given super-low interest rates? (This is more of a debt and cash flow question. Please ask me about this one.)
There is more to say. Long-time readers of TGIF 2 Minutes may see the following advice coming: ALL answers to the above situations depend on far more than simply the amount money that can be earned from the sale of a home or property – although “opportunistic cashing in” is still an important factor. Start with knowing at least three things: amount of current debt, level of savings, and goals for both short- and long-term.
And remember, no decision is perfect, and luck is a factor. What do you think?