How to cope with a stressful housing market


When looking for a home this summer, first-time buyer Xinyu Li felt emotionally overwhelmed. Several offers were turned down by her and her boyfriend, and Xinyu obsessively checked online offers.

“It was a lot of stress and fear,” she says. “I had to go to therapy”

Xinyu’s psychotherapist advised her on mindfulness strategies and suggested that they only look at online offers once a day. After Xinyu closed an apartment in New York City and stopped spending endless hours looking for an apartment, she felt better and stopped seeing her therapist.

Buying a home is a stressful experience even in normal times. In part, it’s because of the sheer size of the transaction – a home is the largest single purchase most people make. Then there are the emotional considerations on lifestyle issues such as commuting times, school quality and crime rates in the neighborhood.

The 2021 housing market is far from normal as it increases the stakes on the mental health of home buyers. Prices have soared to record highs, inventories are extremely tight and bidding wars are the order of the day.

These market conditions have intensified a process that is always challenging into one that can test the mental health of even the most seasoned homebuyers.

“There’s a deeply emotional bond with home ownership in general,” said Ryan Gorman, president and CEO of Coldwell Banker Real Estate. “In a tough market and a market with limited inventory, there are more buyers than houses to buy. If something is emotionally important, financially important and challenging to you, it can be quite stressful. “

House prices on a tear

Home prices rose in double digits during the coronavirus pandemic. The typical American home sold for $ 352,800 in September, up from $ 311,500 a year earlier, according to the National Association of Realtors.

In Xinyu’s case, the stakes were even higher. She and her boyfriend paid $ 882,000 for their Brooklyn apartment.

These are the numbers that create high pressure situations, says Dan Ariely, behavioral economist at Duke University and author of Predictably Irrational and other books.

“All major purchases can be stressful,” says Ariely. “Big purchases, by definition, mean that any mistake can be big. It’s inherent. “

Bidding wars create many losers

If home buying is always stressful, today’s inventory shortage adds a new wrinkle: sharp-elbow buyers battle each other for homes.

Only one person wins a bidding war. If a dozen buyers are vying for a home, 11 are losers.

“The biggest reason buyers are disappointed is the loss of a property,” says Xinyu’s realtor James McGrath of Yoreevo real estate agency. “In order to avoid disappointment as much as possible, it is important to have appropriate expectations. It always hurts to lose, but when a buyer knows their quota is 25 percent instead of 95 percent, it won’t be that disappointing. “

Of course, the level of competition adds a new layer of stress. Buyers know they have to bid aggressively to survive a bidding war – but that reality increases the risk of overpaying.

“A hell of a experience”

First time buyer John Dempsey moved into his new apartment at the beginning of November. He paid $ 255,000 for a townhouse in Wilton Manors, Florida.

This victory came after months of looking for an apartment, which he describes as a “hellish experience”. Dempsey lost bid wars for six properties – after each time he imagined moving into the house he couldn’t get.

“You put a little piece of your heart into the house. And then suddenly the carpet is pulled away, ”says Dempsey. “You are slowly becoming discouraged.”

Dempsey struggled with an agent who often took hours to answer his queries. He eventually moved to, the mortgage and real estate company that Dempsey works for as a senior executive assistant, to become a buyer broker.

“She was so communicative,” says Dempsey. “She said, ‘Don’t worry, you will get it.'”

Dempsey feels happy in his new home, and he says the experience underscored the importance of emotions when buying a home.

“I think people forget the emotional connection their home has,” says Dempsey. “For me, home is your consolation. It is your peace. “

How To Cope With A Difficult Home Sales Market

Home buyers often focus on numbers. What is my credit rating? Where are mortgage rates? What house I can afford? How much deposit do I have to pay?

However, emotions can be just as important, especially in an unbalanced market. Here are a few tactics and tricks to help calm your mind and maintain your sanity:

• Understand how crazy this market is. Coldwell Banker’s Gorman suggests a “leveling meeting” with your real estate agent to determine expectations for pricing, pace and level of competition. “Even if you’ve bought a house before, this market isn’t like it was back then,” says Gorman.

• Prepare to lose. “Losing is no fun at anything, be it a checkers game or bidding for a home,” says Gorman. The deep emotional stakes when buying a house make it particularly difficult to lose.

• Pace yourself. Xinyu’s frantic search for offers kept her no closer to landing a property. “There’s a kind of paradox there,” says Gorman. “I’m not sure if endless googling will give you any more information. Clicking Refresh every 5 seconds is likely to stress you out and not really help you. “

• Find an agent to guide you through the process. Dempsey says his first agent’s patchy communication spoiled the process for him. Gorman isn’t surprised. “The lack of information creates a void that is often filled with fear,” he says. Gorman says “having a quiet chat with an experienced agent” is critical.

• Adopt the mindset of inevitability. Ariely says you should eliminate the yes-or-no part of the decision. “People need a new home and there is no option not to get it,” he says. By foregoing this uncertainty, you can focus on choosing the right home.

• Give yourself a time limit. For example, Ariely suggests setting a deadline of three months. Accept the best property you can find within that time frame.

A prospective buyer and her agent visit a home for sale during an open house in Parkland.

The search for an apartment can endanger the mental health of the buyer


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