I’m Selling My House (and Buying One!) in a Falling Market

Welcome to the latest insights from Wells $treet, where I write about business and money from an offbeat perspective.

I often pass judgment on others who make unfortunate financial decisions.

Now it’s your turn to judge me. Let me have it.

Shields up!

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Right now I’m sitting at a Starbucks as strangers traipse through my home. They’re walking through my kitchen, my living room, my bedroom.

I’m having an open house.

Before I left and handed the keys to the realtor, I bought fresh flowers, hid the toothbrushes, took down the family photos, piped classical music through the speakers, put down the toilet lids, turned on the outdoor fountain, sprayed lavender mist on various towels, and put the dog in the side yard.

I’m exhausted, but the house looks so damn good my husband asked, “Why are we selling?”

Excellent question.

Yes, I’m selling my home of 30 years in a falling market. I probably qualify as my own Dumb & Dumber entry.

My CNBC colleague, Diana Olick, reports that home prices have fallen 2% in the last couple of months, with declines in 97 of the top 100 markets. Goldman Sachs predicts prices will fall another 5-10% over the next year, maybe more.

However, the median selling price is still 13.5% higher than a year ago, and it’s a whopping 40% higher than pre-pandemic prices back in 2019 — 40% in only three years!

As 30-year mortgage rates close in on 7%, there aren’t a lot of homes for sale. Axios reports that many homeowners are locked into low-interest mortgages and don’t want to move to another house with a costlier loan. This helps keep my competition off the market.

My husband and I were not intending to sell. We like our house, we love our friends and neighbors, and we’ve been (happily) handcuffed to the benefits of Prop 13, the landmark 1978 amendment to the state constitution authored by anti-tax crusader Howard Jarvis. Prop 13 caps initial property taxes at 1% of the purchase price of a home, and the tax can only grow 2% a year. But when you move to a more expensive home, your property tax jumps to 1% of the new purchase price (there are some exceptions).

Aside: Howard Jarvis was so famous in California that the directors of “Airplane!” put him in their movie. He played a very patient taxicab passenger, and he even has the closing line.

Prop 13 has held us back from moving over the last 30 years, and my husband and I realized the decision kept us from enjoying the equity gains that come with occasionally stepping up to a more valuable house.

Moving Day, September, 1992. Mom jeans!

So what changed our minds?

Well... there’s one house we’ve long coveted on California’s Central Coast, and this house suddenly came on the market. It was priced out of reach, but we waited, and the price eventually came down. We made an offer, the homeowners countered, we countered back, and a deal was struck.

It’s a contingency sale, so today’s open house is a big deal. I’m not ashamed to admit that I’ve been checking in on the foot traffic via my Ring doorbell and listening to what people say as they leave. “The countertops are the only thing I don’t like,” said one person. You don’t deserve my house, sir!

My husband, meanwhile, is having a hard time. He’s very risk averse. Nothing makes him feel more secure than money in the bank, and we are about to withdraw a lot of that money. I pointed out that our savings account is losing value right now against inflation. His response was that any house we buy will be worth less in six months. It’s like buying a new car, which loses a good chunk of money as soon as you drive it off the lot.

By the way, we also just bought a new car.

My husband has therefore assumed a fetal position for the remainder of 2022. Our sudden wild spending is highly out of character, and our daughter believes the bank should do a wellness check on us.

But houses aren’t like cars, and we’ve been through this before. We bought our current home two years before the 1994 Northridge earthquake, which — when combined with the defense industry leaving town — sent prices plummeting. They eventually rebounded, and then some. The house has tripled in value.

So I have faith, long term. Still, this is a huge move for us. Our children grew up in this house. I’ve never repaired the closet shelf where my then 6-year-old daughter declared it was her “klosit.” She’s now a 32-year-old attorney.

I’ve never painted over the area on a window shutter where my then 6-year-old son wrote the date “11-13-98.” He’s now a 30-year-old husband and father and USMC Captain stationed in Okinawa.

If this house sells, I’ll have to erase those memories, literally.

Ever the optimist, I believe it’ll all work out, and I’m already planning a massive garage sale. I’m also terrified. I don’t even know what’s in the attic. (A crib? A 1995 desktop we kept out of fear that someone would steal the information on the hard drive??)

Worst-case scenario, we won’t get a sufficient offer, and we don’t move. We’ll have to stay right where we are, with neighbors we love and a house that’s never looked better.

No. Strike that. The worst-case scenario is that we sell this house, and I have to go into the attic.

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Would you buy or sell a home right now? What if it was your dream home? Am I an idiot? Don’t answer that.

You can join the conversation below or 📧 jane@janewells.com.

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Cover image is the most unrealistically chipper depiction of the home-buying experience ever… by Andersen Ross/Getty Images