We bought a house in February, then sold our existing home a week later. The purchase was made in a bidding war because we wanted to be in a specific school zone. Now we see homes sitting on the market and prices going down. We are absolutely sick about it. Did we make a terrible decision? – KEEPING ME UP AT NIGHT
DEAR KEEPING: As the shift to a more balanced real estate market makes headlines, it’s giving pause to those who purchased when values were at their peak. Many bought homes at the top of their budget. In the heat of a bidding war, they may have offered more than they were comfortable with. Some have a degree of buyer’s remorse after the fact.
I call this “the winner’s curse”.
I expect you bought your home following an extensive search. It had features that were perfect for you and your family, including the school zone. If it weren’t for all the doom and gloom that is currently in the news, I suspect you’d be excited to spend your lives there.
From the sound of it, you bought and sold in the same market. You may have paid a premium for the house you have now, but you likely also benefitted from a bidding war when you sold your previous home.
At this point, it’s important to remember that real estate is a long-term investment. If you had bought this house with the intention of flipping it, the story would be different. Your position would be less favourable if you needed to sell right away, but that’s unlikely to be the case for most of today’s buyers.
I purchased my first home decades ago, in conditions that were very similar to what we’re seeing now. Fortunately, it was a long-term investment. I bought relatively high, but had no intention of moving, so I didn’t even notice the dip in the market. When it came time to sell a dozen years later, the market had bounced back, and the value of my home had gone up by over 20 percent.
PRO TIP: As the real estate market levels out and home values start to rise again, any remorse that buyers are feeling may well be short lived. I expect that within in a short period of time, the summer of 2022 may be one that buyers look back on as ‘the time when we should have bought’. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.