I’m a Housing Reporter Who Took a $25K Hit Selling the House I Bought at the Peak of the Market. Here’s What I Learned.

This article was first published on Inman

Senior Data Journalist Mark Worley co-authored a new Redfin report showing that roughly 6% of U.S. home sellers are at risk of selling at a loss. The analysis hit close to home—he and his wife just did exactly that, selling their St. Louis home for less than they paid.

In early 2022, my wife and I were temporarily living downstairs at her parents’ house, south of Seattle, trying to work out where to move next. 

We had just returned from my native Australia, where I had been posted by a previous employer to help open a new office. (Long story short: the office opened a few weeks before the pandemic hit and we spent much of our time abroad under covid-related lockdowns and curfews.)

Like many at the time, we could work from home and live anywhere in the country. We looked at a map and considered our options. We didn’t want to follow the crowds flocking to pandemic homebuying boom towns like Austin or Tampa. With a relatively constrained budget, we looked to the more-affordable Midwest, and landed on St. Louis.

I had connections in St. Louis—my Oklahoman dad spent time living there in his younger years. And when I hit the road to explore the U.S. a decade ago, St. Louis was my favorite stop. The city is a long way from its heyday, but it has a rich history, world-class arts and cultural institutions, a dynamic food scene, friendly people…and gorgeous homes.  

There, within a mile or two of the iconic Gateway Arch, one can find a beautifully renovated historic brick home in a walkable, tree-lined neighborhood for less than the price of a one-bedroom apartment back in Seattle.

We packed up our car and moved to the center of the country. 

Chasing our dream home…and losing out

We chased dream homes for months—putting in offers well over asking price, adding escalation clauses and waiving inspections where possible. It wasn’t enough. We ended up as the second-placed offer on four separate occasions and it felt like we would never find a home. 

Even as rising inflation pushed mortgage rates skyward in mid-late 2022, and the real estate market started sputtering nationally, it didn’t feel that way in St. Louis. The homes we wanted were listed on Thursday and went under contract by Monday, if they even made it that far (many were snapped up before the first open house).

I remember telling my wife at the time it didn’t make sense to rent in a city where buying was so affordable. So onward we went with our house hunt. Now, with 20-20 hindsight, I know the better financial decision would have been to rent.

Instead, we returned to a house that had been sitting on the market for more than two months—unusual given the speed most homes were snapped up at that time. It was a beautiful old South City home, completely renovated with all the modern upgrades we were looking for. It had a lovely yard with a two-story carriage house for a garage. We had initially ruled it out because it was priced a little high and located outside of the neighborhoods we wanted to live in, but after losing out so many times we had to shift our strategy. 

We offered $50,000 under its original list price and the sellers couldn’t sign the paperwork quickly enough—definitely a red flag in hindsight. 

None of this is to say we regret buying the property. We loved that house. And we truly loved living in St. Louis. But we overpaid, setting a then-record for the neighborhood. We bought at the very top of the market in a part of the city where homes did not sell quickly. 

Two years later, life changed and we had a new decision to make

Less than two years after moving in, our life changed. My wife was pregnant, I had a job offer with a great company in Seattle and we decided to move back closer to our family and friends. 

We had two options: sell the house, or rent it out. 

It was an easy choice. We knew the stress—and cost—of maintaining a 130-year-old rental property from 2,000 miles away, while taking care of a newborn baby, was too much for us to handle.

St. Louis home prices had continued to rise in the two years after we bought, but in our neighborhood, sales were slow. Buyers were no longer overextending themselves the way we had. So we listed our home at the same price that we had bought it, knowing we were taking a loss when agent fees and closing costs were taken into account. 

Not a single potential buyer came to view the house in the first two weeks it was on the market. By then, we were back in the Pacific Northwest, carrying rent payments in addition to our mortgage. The weather was turning cold and homebuying season was almost over.

We lowered the price by $25,000 and a single out-of-state buyer saw the home online and fell in love, much as we had. They made an offer at the revised list price that we gratefully accepted. This time, we were the sellers rushing to get the paperwork signed so we could finally exhale. We successfully closed the deal last November.

Very few homeowners in the U.S. are at risk of selling their homes for less than they bought them for. But those who have to sell now, after buying at the tail end of the pandemic buying spree, are much more likely than others to take a hit. 

We learned that the hard way.

Buying a home will always be a long-term investment. Trying to time the market is a fool’s errand.

Still, while we walked away with less money, we were carrying two years of amazing memories, new friendships and a beautiful baby girl. In my mind, we came out ahead.

The post I’m a Housing Reporter Who Took a $25K Hit Selling the House I Bought at the Peak of the Market. Here’s What I Learned. appeared first on Redfin Real Estate News.