Real Estate

4 Buyers Spill on What It’s Like To Buy at the Top of Market and Sell Now


The real estate market is in a tricky spot right now. Homeowner equity hit a delirious peak of $17.6 trillion in May 2021, thanks to a pandemic-induced 45% spike in prices. Since then, it has declined by more than $1.3 trillion, according to the latest data from Black Knight’s Mortgage Monitor for September 2022.

Behind these sweeping data points, though, are real people: folks who bought at the top of the market and were forced to sell due to a change in life circumstances beyond their control. Even professional flippers who make a living watching and anticipating the market have been hit hard by the real estate roller-coaster ride.

Read on for real-life insight into how homeowners handled their setbacks. Their experiences may provide not just food for thought but also a blueprint for action if you find yourself in a similar spot.

Situation No. 1: Take the hit and move on

“If you are forced to move and sell immediately, sometimes that means you just have to take a loss,” says Dmytro Kondratiev, an attorney with LLC Services. “My good friend ended up in just this situation after saving for years to buy his dream home with his family. They found the perfect property and made an offer, even though the market was at its peak. They knew they were paying a high price, but decided to go ahead.”

Unfortunately, he was soon offered a job in another state, and the family was forced to sell.

“The market had cooled, and they ended up selling it for significantly less than they paid,” Kondratiev says. “They were left with a financial burden they didn’t expect, but the job offer couldn’t be ignored, so they moved forward.”

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Situation No. 2: Cover loss in value with rental income

Amid a major and unexpected setback, some homeowners are able to rethink their lifestyle and actually recoup losses.

“We had a client in Philadelphia who purchased a four-bedroom home with the goal of staying there permanently,” says Alex Capozzolo, co-founder of Brotherly Love Real Estate in Philadelphia. “Due to layoffs as a result of COVID, our client was forced to move out of this property. Although they wanted to sell, they ultimately decided to rent [out] the property due to market conditions.”

The homeowner turned around and rented a smaller home for themselves. The steady rental income from their previous property and the smaller outlay for their new home helped them cover their loss and even balance their budget, despite the change in employment status.

Situation No. 3: Double down on your investment to recoup losses

Pouring more money into what already feels like a loss is a gamble. But for some, it pays off.

“One of my clients in Palm Springs, an area where values skyrocketed, bought a home there, paying nearly $1 million, that would have been worth less than half of that pre-2021,” says Scott Ehrens, a real estate agent at Compass in Palm Springs, CA. “Then, he did an extensive renovation worth about $300,000. Part of his motivation was to make the home a vacation rental.”

But due to changes in the economy (interest rate hikes and stock market declines) and the local market (changes in vacation rental rules), the value of the home dropped from $1.7 million at its peak postrenovation to $1.1 million.

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“The homeowners knew that, despite the change in value, they didn’t want to hang onto the house, especially since they couldn’t get a vacation rental license,” Ehrens says. “They did everything they could to make the house stand out in the market.”

They doubled down, finishing every detail of the renovation, investing in costly staging with a professional from Beverly Hills, CA, and listing the home for $1,385,000.

“They ended up selling it close to asking price in a month, and despite all of the expenses, they recouped all of their costs and made a small profit,” Ehrens says.

Situation No. 4: Even professional flippers are getting hit

It’s normal to see the average homeowner get swept up in overvalued markets, but in these times, even pros who flip homes for a living have been hit hard.

“I’m a full-time real estate investor, and even I got into trouble,” admits Will Harvey, co-founder of Home Sale Solutions in Virginia. “We went under contract to buy a condo in Northern Virginia and flip it. Right after we purchased it in February 2022, it felt like we were catching a falling sword with rates rising and buyer demand slowing.”

Harvey’s company sat on the property for months, doing multiple price drops. They finally sold it at the end of November 2022, and ended up making $400—a substantial loss considering the time and work that went into purchasing and selling it.

“It was the absolute worst timing,” Harvey says. “Went under contract when things were great, and sold when things were horrible. If things went how we originally anticipated when we analyzed the deal, our profit would have been around $50,000 or even higher. There have been lots of lessons and takeaways from this that we’ve since applied in the changing market and been successful on flips after this.”

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Harvey says he would avoid buying anything that has spiked significantly in value in a short time period, and that he would be much more cautious about buying anything in regions where values appreciated so quickly.

Realtor.com is looking for people who believe they overpaid for homes they purchased within the past two years. If you would be interested in being interviewed for a story on this topic, email Clare Trapasso at .



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