So I get questions all the time about how to time the market,
when to sell your home. So you can sell on the top of market,
get the most bang for your buck, maybe rent for a couple years,
move in with some family, and then buy again when the market
comes down and make a killing. So one thing I'm hearing over
and over again, in this current market is sellers, or potential
sellers that are considering selling their home, cashing out
on the equity on their home. And their thought process is, I'm
going to buy in a couple of years when the market crashes,
when the market comes down, I'm going to make a killing, I just
have to wait, just wait for the market to come down. The reality
is one of the worst things you can do. And this is across the
board, just about every single person will agree with me here
trying to time the market is generally not a good idea. But
an interesting thing happened me the other day, I had a client
who told me, Dan, I either need to sell my house right now. Or I
need to wait two years to sell my home because I'm going to get
some tax savings. If I wait two years to sell my home has to be
exactly two years or maybe more than two years. And I told this
client, well, you know what, if I were selling my home, I might
be a little concerned about where the market is gonna be in
two years. I'm very confident we're not at the top of the
market yet. But two years from now. It's a little bit, it's a
little bit concerning. And it got me thinking, if in two years
from now, I would be concerned about selling my home. in that
timeframe, what is different about two years, then six
months, four months? Now, what's the difference? Where are the
numbers where the stats actually coming in. And maybe just maybe
if we really dig into the numbers, we can pinpoint the
exact moment when more homes will start hitting the market.
And the potential of home prices going down will increase. And
just a word of advice. If you really are considering selling
your home based on what I'm saying here today, I would
recommend that you get a second opinion, it's always good to
have someone know your exact situation your exact needs and
wants and can analyze for your area, if it's a good idea, or if
it's a bad idea. So between March of 2021 in March of 2023,
Is there gonna be a time that's gonna be an optimal time to sell
your home is there gonna be a time when home prices are going
to start coming down? That's exactly what we're going to dive
into today. So if you're interested, this is gonna be a
very data driven video. So you just want to know the answer.
You can fast forward to the end. That's okay, I'm cool with that.
If you hang around until the very end, I'll add a couple of
additional tips if you are considering you're selling your
home to help you get top dollar feel to get more than you think
or probably even your real estate agent thinks that you can
get for your home. So first, let's start with how many homes
do we have on the market? And how many homes Do we need on the
market for home prices to start coming down. And there is a
number that we can go off of is what everybody uses for figuring
out if we're in a balanced market or we're not in a
balanced market. And that is having six months of inventory
six months of inventory means if you take all of the homes that
are currently available on the market today, and the average
number of homes are being sold on a daily basis, how many days
would it take to sell all of the inventory that we currently have
in stock. If we look back at February of 2021, we had 2600
homes available on the market in San Diego County, which accounts
for point eight months of inventory. So if you extrapolate
that out to be a balanced market where neither buyer or seller is
in control of the market, we need 17,000 more homes to hit
the market in San Diego County, which means we need about 18 to
20,000 homes, they hit the market for it to be a buyer's
market. Okay, at least now we have a number that we can go
with. And the two ways that we can get to more of a buyers
market and get out of this seller's market would be if
demand changes, or supply changes, pretty simple supply
and demand. Right. So as far as demand goes, the amount of
buyers that are actively out there looking for homes, there's
two main scenarios that we can see. One is interest rates can
go up, and we were just at historic lows, they've started
to creep up a little bit. But most people out there would
agree that most likely interest rates are not going to go up to
a significant number, by the end of the year, maybe creep up half
a percent, maybe a full percent, I really don't see that
happening either. And that is going to pull some buyers off
the market but not a large number of buyers off of the
market. And the other reason demand can go down is because
more and more buyers are going to be priced out of the market.
if the market goes up, if the median home goes up another
$100,000 there are going to be more people that can't afford at
that price point to own a home in San Diego. And now let's get
into the reasons why supply would increase why inventory
would increase in San Diego so we can get up those those 15,000
homes starting with the elephant in the room, which is
foreclosures and evictions. Now we all know these have been put
off through the cares act. And when Biden came into office,
he's extended that out until June 30. So people cannot be
foreclosed on or evicted in most scenarios in to extend this out
even further. The city of San Diego has added their own
protections basically extending this out at least at minimum of
60 days after July 1. So if nothing else changes, we're
talking people in start to go through the foreclosure and
eviction process around September 1 here in San Diego,
then the next question is alright, people can be
foreclosed on people can be evicted. Now, how long is it
going to take for properties to get onto the market? Let's talk
about these processes a little bit. So as far as eviction when
you're trying to get some tenants out of your property,
there is a high likelihood at this point. If a landlord has
tenants that have not been paying rent for the last six
months, maybe they're done with it. Maybe they don't want this
investment property and more, they're just ready to sell it
and make a little bit of money. Well, the process of evicting
those people out of that property, easily could take one
and a half to three months, there's a bunch of red tape,
especially in California that can delay this process over and
over again. So let's say three months to get them evicted, and
then another one to two months to get the property fixed up and
ready to sell. So we're talking another five, six months later
that these properties are going to start hitting the market. And
it's not much different with foreclosures, either the whole
foreclosure process in California can take 200 days,
maybe even more. So as I promised, let's actually put
some numbers on this. So it starts to make sense. So we're
talking six to eight months, after people are allowed to be
foreclosed on after people are allowed to be evicted, we're
actually going to see, hopefully, maybe possibly, a
flood of these properties start hit the market, which would put
us at about February to March of 2022. And then the million
dollar question is how many people that are not current with
their mortgages right now are going to be foreclosed on how
many homes are actually going to hit the market? That is the
million dollar question. But we can use some numbers and some
logic to extrapolate out from here. San Diego County has 33
million residents, which is roughly actually pretty close to
1% of the US population. And although the quantity of
homeowners in America that are not current on their mortgage is
steadily decreasing, and has been for the last six to eight
months, we still have seen 2.4 million Americans that did not
pay their mortgage in December of 2020. So let's just say let's
just say that half of those 2.4 million Americans that didn't
pay their mortgage in December, and that being foreclosed on in
San Diego is roughly 1% of the US population. That means 12,000
homes could potentially hit the market through the eviction
process. Now, there's no doubt I'm making some assumptions
here. The reality is there are a lot of Americans that took
advantage of the cares act, and went into forbearance on their
homes, just because they were trying to get away with not
having to pay mortgage for a couple of months. Now, how many
of those Americans actually couldn't afford the mortgage?
And how many of them were just trying to get away with not
paying a couple months mortgage? I don't know. You don't know. No
one knows. But regardless, we're gonna go that 12,000 number
because that's the best number we can come up with right now.
And the second reason is because people are waiting to sell their
homes, because they're worried about becoming buyers cool. They
can get a whole bunch of money for their home, they could sell
their home for top dollar as most real estate agents are
telling you. But then what the heck are they going to do they
know how hard it is to buy a home, they don't want to get
involved in that type of situation. So as more home start
to the market, then these potential sellers are going to
start selling their homes because they're ready, they're
ready. They're just waiting for the buyer side of things get a
tiny bit easier. So how many homes is this actually going to
account for? We don't really have an answer for that. But if
we have 12,000 homes that are going to hit the market because
of foreclosures and evictions, and we need about 15,000 homes
in the market. That means that this gap, these other sellers
that have just been waiting, as long as around 3000 sellers,
then we're going to hit a neutral market. If not, we're
going to turn into more of a buyers market. Again, this isn't
if trying to time the market is a bad idea. It's generally a bad
idea. But hey, we've run the numbers here in this seems seems
like it makes a lot of sense. And again, we're looking at
somewhere around February to March of 2022. In probably
rolling into the summer, we'll start to see inventory increase
a little bit more, a little bit more a little bit more. Here's
bad news, we've seen the median home in San Diego for detached
property go up 15.6% in the last 12 months from $656,000 to
$760,000. If that trend continues, we're talking about
another increase from $760,000 to $880,000, for the median
detached home in San Diego County,
a lot of money before we start to see any changes in the
market. And when we get to that point, the question is, will the
market simply balanced out? Will it start to come down? Because
if we're going up another 15% before we see any changes, then,
man, I can tell you, I've seen people sit on the sidelines to
watch the homes that they want go up by $100,000. And that
stinks. So if your number one goal is to sell your home at the
tip top of the market, we're not there yet. Don't listen to your
real estate agent neighbor that's telling you it is the
best time to ever sell your home in history. Because it's not we
still have a little bit more time before we're there. And
again, it can be really tough to time these things. So when is
going to be the absolute best time to sell your home. Maybe
somewhere around 12 months. I mean that's the conclusion we
came to in this video. But the reality is there are a lot of
other variables that go into this. And I can tell you guys
the the reason why I decided to make this video is because I had
someone call me up someone that watch my YouTube videos and said
Dan, my real estate agent is telling me that I should sell my
home because I'm gonna sell it for top dollar. I can go rent
something with my family for a year two years wait for the
market to crash and we can make a bunch of money. And I'm really
scared because I'm worried that it's not going to go that
smoothly. And I can tell you guys, there are 20,000 real
estate agents in San Diego County in only 2000 homes on the
market. Little over 2000 homes.
on the market, which means real estate agents are desperate,
they're desperate for listings, they're desperate for business.
So of course, most of them are going to tell you that you
should do these things. Because it benefits them, it doesn't
benefit you don't want that be the reason you make this huge
financial decision for you and for your family. And as
promised, even though this is a crazy crazy seller's market, if
you want to sell your home, there are some easy things that
you can do to get more bang for your buck get more money for
your property. Just because the markets hot doesn't mean you
need to put a sign in your yard and sell it as is. Now, if you
want to net more money, there's tons of things you can do. And I
can tell you from working with buyers, what buyers want is a
home to be moving ready. They want new carpet, they want
freshly painted walls, and you know what they're looking for.
They're looking for that freshly upgraded kitchen countertops,
cabinets, they're looking for those subway tiles who doesn't
like some good subway tiles. So I can give you a massive,
massive tip from my playbook. I work with a company called Kirby
o and they are in all sorts of different markets. There's no
affiliation, they don't even know I'm doing this. In fact,
don't tell them I'm doing this because I might get in trouble
for talking about them on here. They're a great company, and
they can help you kind of flip your house or get it ready to
sell. So if you don't have money that you want to pay out of
pocket to do some upgrades, if you don't want to deal with
contractors, you're gonna have myself or someone else come in,
take photos of your house, and they can give you quotes on
upgrades over the internet, they're going to specifically
focus on doing things that can add more value to your home at a
lesser expense, they want to help you net more money in your
pocket. And here's the best part. You don't have to pay for
any of this out of pocket. They expedite the entire process. And
you actually pay for these items through the close of escrow. You
can't beat that. So what do you think? Was this an accurate
assessment? Do you disagree with my thoughts? If so, let me know
in the comment section below. Let's have a friendly little
discussion. I'd love to know your thoughts on that situation.
And if you think I'm right, do me a favor, hit that like button
that lets the YouTube Gods know that you like this video and
they'll they'll help put it out in front of more people. And I
would really appreciate that. And as always, if you're looking
to buy a home here in sunny San Diego, I'm happy to help you
out. Happy to have that conversation. Thanks so much for
watching this video. See you next time.