> Data tells the story: on average, if you sell your home within 90 days, you’ll do it at 15% higher than what you bought it for.<p>There's some selection bias here. Those who got lucky (e.g. they bought the house cheaply) found it easy to sell for a good price quickly. Those who got unlucky and couldn't find a buyer quickly are excluded from the "90 days" window so don't contribute to the statistic.<p>It might be true that homes sold within 90 days of purchase sold for an average of 15% higher than the purchase price, but it doesn't mean you can expect to sell a home within 90 days of purchasing it for 15% more than you paid.
There is massive selection bias here. You are not showing how many homes were listed but didn't close. This is measuring only successes, not all the failures to sell.<p>Also you need to factor in realtor fees on both the original purchase and then subsequent sale (I do not know what they are in the UK, but in Canada they can 3%-7% of the transaction, and this exclude lawyer fees and mortgage discharge fees) which means that you need to get a certain percentage of "gain" in the selling price compared to the purchase price to make any real profit at all. If this was Canada, a good percentage of these so called "profitable sales" would actually be breakeven or slight losses.<p>Assume realtor fees of 5% on both the original purchase and the sale, this completely wipes out the profit of $168M on the $1.5B of sales. Hmm...<p>Strange article. It is like the author is not at all knowledgeable at all about how realestate works, or maybe UK is very different than Canada.
I'm not sure whether I understand (or trust) this analysis.<p>- If I buy an house and resell it within a year, barring extreme circumstances, I'm probably a real estate investor/professional; maybe it's the fact that I was able to buy a property which I felt was underpriced, then maybe I did some minimal "rejuvenating" modifications, and sell it at a premium.<p>- We don't see the negative data; how many properties were on sale and were not sold? We're very likely to introduce a bias, otherwise, because I suppose very few people would sell at loss, hence we see few sales at less than purchase price.
I really love articles like "are people who <do something totally ridiculous> screwd?" This gives the impression for these people that they are doing something totally normal, and that it is the world screwing them.<p>You never ever want to sell a home you live in short-term. You only do that if you really don't have another choice. It's probably your biggest investment. You probably bought a bigger home than you can afford. Sell it for what it's worth and invest the time. The costs of selling too quickly might be retiring at 55 years of age or at 65 years of age.<p>And if you decide to go the easy route anyway then it was you who screwed you. As said before being in a f*d up situation otherwise might be an exception. But it might also be a sign that you do in general not the sensible thing.
Homes that resell within 90 days are fix & flips. Yes, they sell for a higher price, but there is also more investment put into them than just the purchase price.
Wait, we are supposed to ignore transaction costs? I kept waiting for them to be factored in, but it never happened. I have a simple reason for the 15% number — you need to make ~ that much to be breaking even!<p>Humans have strong loss aversion and it’s common to come across properties where the offer price is clearly set at a point where the sellers will only be making their money back. You can make fair offers in this situation but we had them declined every time. This was most evident during the 2008-2010 housing bust when we had to look for 18 months for a house that was fairly priced — and after we bought, we got two calls from people we’d made offers to — offers which they declined — asking if we were still interested in buying at our offered price! In the case of one house I tracked, they ended up selling at over 10% below what we’d offered them!<p>Combine that with the lack of any kind of data on houses that didn’t sell, and I would take this analysis with a hefty nugget of salt.
A warning to those taking these numbers seriously. I had a go of Tenence service after reading and it's property valuation service gave Very dodgy results for my previous properties.<p>For my last property it gave the wrong square footage and it's valuation method is ridiculous. For example, sold 2010 £200k sold 2017 £400,000 -> valuation £300,000?<p>Valuing a property based on the average of previous sold prices regardless of time-scale is nonsense and needs to be fixed. If not, I am looking forward to buying that Mayfair townhouse last sold in 1930 for £1,000 ;-)
>on average, if you sell your home within 90 days, you’ll do it at 15% higher than what you bought it for.<p>Uh, well, what I think this probably means is that people who _aren't_ going to make money _don't_ sell a property within 90 days. Even if they were buying it as an investment/flip, if they aren't going to be able to sell it for a ~15% profit... they hold on to it longer. Until they can.<p>Realizing this confusion of correlation with causation makes the rest of the "advice" in the article somewhat suspect too.<p>It's interesting findings, that there are significant numbers of owners managing to flip a house quickly for profit. But I'm not sure it can be extrapolated into a "what you should do".
You should label your axes properly. You haven't defined 'price change' and 'gap' anywhere in the text, so we have to try to deduce the meaning from context.
I'm still not sure if the units are percentage change or thousands of GBP.
> If you can wait till year-end, then you're even better off<p>So .. why stop here? Isn't this just saying that since London houses are an extremely rising market, the longer you hold the more profitable it its?
The relevant factor in short term asset holds is transaction costs. Whether you're buying stocks or houses. If you can account for them and make a profit anyway, you're making money. Generally you need a market edge to lean on.<p>But at the end of the day it's hustling in a zero-sum market. Holding on to your edge requires work. And doing the deals requires work. Not something you want to make a career out of if you value your sanity or free time.
This story gives the impression that you can somehow magically make a profit by buying a house, waiting a few months, and selling it. This is completely ignoring the concept that most of the data is going to be from house flippers who don't just buy and sell houses, but renovate houses. If you are a professional who buys fixer-uppers that no one else wants the hassle of dealing with, then put a lot of money and work and skill into them, yes you have a good chance of selling it for more than you spent on it.<p>If you just buy and sell, and don't do anything to the house, you're very likely to lose money (when factoring in transaction costs) unless you really know what is happening in the market. People see what you bought the house for a few months ago, why would they pay more than you did? Also, as many others have mentioned, there is a lot of selection bias. People are less likely to sell if they have to sell for a loss, if they have to hold onto a property they <i>wanted</i> to sell because they would lose money if they sold, they don't show up in this data.