I DROVE BY the condominium I sold last year. It was bought by a young lady in her early 20s. I noticed a for-sale sign hanging near the front entrance of the building.
Out of curiosity, I looked up the unit for sale online. It had the same floor plan as the condo I’d sold, but was located on the first floor in the back of the building. The condo I owned was located on the top floor facing the street—a much better location.
The asking price for this condo was $466,000. I sold my unit in June 2020 for $380,000. At the time, COVID-19 was wreaking havoc with our lives. I received two offers, both below my asking price. I made the same counteroffer to both parties. But only the young lady responded to my offer. The other party told my agent they were no longer interested, because they thought real estate prices were going to drop.
We all know real estate prices didn’t go down. On the contrary, they went through the roof. It’s yet another example of how difficult it is to predict what real estate—as well stocks and interest rates—will do in the short term.
Back then, even CEOs of major companies didn’t get it right about the economy. Automakers in 2020 thought there’d be a deep recession, so they cut back production and cancelled orders for supplies, such as semiconductors. Meanwhile, car rental companies sold off their inventory.
What seemed like a reasonable decision at the time proved to be a huge mistake. The economy turned out to be entirely different from the one they planned for. Demand for automobiles is actually higher today than before the pandemic.
I told my wife about the asking price for the condo. She said, “The young lady bought before real estate prices took off. It took courage when the market was rattled. Good for her.” Indeed, it sometimes takes courage to invest our money—and the more courage that’s required, often the better the opportunity.