There is a commonly held belief in real estate that virtually everyone has heard if they’ve sold before: “You should move out of your house if you want to sell fast and for the most money.”
But is this really true? Do we really have to turn our lives upside down to maximize the proceeds from our sale? Could we just stay put and save all the time, stress, and money of “getting out” before we sell? To answer these questions, we examined the impact different decisions have on the two big metrics that matter when you sell: days on market and price per square foot.
Bottom line: moving out is rarely the best decision, and, if you have a choice, you should think strategically about whether to stay or go. Finding a marketplace like Aalto where you can test the waters without moving out is highly advantageous.
Excited to find out more about our analysis? Want to learn more about the data in your specific city? Read on.
For years, traditional real estate has encouraged people to move out of their house. The theory behind this conventional wisdom was simple, and in the absence of data to the contrary, logical:
But how does this theory measure up to reality? Not well. In at least some of the most desirable parts of the greater Bay Area, rushing to move out might be a mistake. According to our analysis of tens of thousands of home sales over 15+ years across Marin County, the 680/24 Corridor of Country Costa County, and San Mateo County, the anticipated result of a quicker sale and higher sales price frequently fail to materialize.
The question: “If I move out, will my home sell faster?”
Let’s get a base level of understanding first. To start, homes sell faster in 2021 than they did in 2009. Time on market was dramatically higher during the recession of 2007-2009, recovered throughout the twenty-teens, and has accelerated further over the last two to three years.
Aside from the depths of the housing market collapse of the late 2000s - and the increase in foreclosure sales - there is little evidence of homes selling faster when unoccupied than while owner-occupied. In the chart below, the dotted lines represent vacant home sales compared to the owner-occupied solid lines:
As you can see, the lines hold very closely together - and that’s a good thing! This shows there is no big discrepancy between moving out/staying put when it comes to days on market. This helps us feel confident in saying that staying put should be your first line of defense when selling your home.
The question: “If I move out, will I get more money for my home?”
As we’re sure you are aware, home prices are way up across the Bay Area.
In our analysis of occupied vs. unoccupied, we used price per square foot as our consistent measure of sales price. This means that regardless of home type/bedroom count, we could look at historical correlation between moving out and what a home sold for.
Across all our counties, it was clear that moving out doesn’t garner you a higher sales price.
While the price difference during the worst of the post-2008 recession is likely inflated by the higher number of foreclosure and short sales during that period, this gap has been persistent over time and reasonably consistent across house size and price ranges within each region.
As you can see, even with market swings, it has been pretty consistent across all three regions analyzed. In short, moving out has actually grossed LESS money on average when compared to staying put.
There is even more to consider when thinking about the net earnings of moving out because typically moving out also requires you to spend more money upfront on things like the below. These extra costs can make the difference even more apparent.
When we first ran these numbers, we took a step back. We’ve been told for years that moving out is the smart move, but the data doesn’t support it.
Important to Note: Every Home is Different
The challenge in applying data and analytics to residential real estate is that every home is different. Any number of variables from the predictable such as number of bedrooms or the presence of a covered garage to the vagaries of timing can influence the final disposition of a property. At the end of the day, your decision should balance our data with your own home’s unique situation.
When we look at this real estate myth, one thing jumps to the front of our minds: flexibility. When selling your home, you should be able to sell without moving out or staging. But the current real estate market doesn’t really allow that flexibility. With days on market ticking, the last thing you feel like you have with your home sale is time to explore.
That’s why we built Aalto. With Aalto, you can put your home up with no days on market and you only share your address with those qualified. Then you can see if buyers are interested in your home the way it is. You get interest without doing renovations, staging, or moving out. You can also leverage our virtual staging/decluttering which is even more appreciated from buyers post-COVID. And with all that insight you glean without moving out, you can make the best decision for your family.
The data above is clear - moving out isn’t always the right move - and you need a flexible platform for your home sale that can help you decide your best course of action.
For now though, we hope you’ve found the first in our series helpful and interesting. If you want to explore the Aalto marketplace for your sale, you can get started right here.
Thanks for reading,
Aalto Insights Team
Here is a high level overview of our research.
*All data as reported to regional MLS and tax authorities from Aaltos Research, Estated and supplemented from other sources. Date ranges from January 2006 to August 2021.
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