Dear Real Estate Adviser,
Is a good time to sell my house now, before it loses more equity, or should I wait until house prices go up again? What’s the best time of year to sell?
You didn’t say where you’re based, so I’m going to hop on my “all real estate is local” soapbox and proffer a broad response. As I’ve already implied, home-selling potential always comes down to the nuances of local markets, specific ZIP codes and even specific blocks.
A truly great location can trump factors such as high area-employment rates, low (or high) mortgage rates, mortgage loan access and other variables. For example, a classic home on a tree-lined block near a prestigious university will always be in demand, despite the economy. Same goes for a quaint house that overlooks a lake or forest, or one with a mountain view.
As for “losing more equity,” odds are good at this point in the cycle that your home has lost most of the value — and equity — it’s going to lose, give or take a few percentage points. But again, that value is only what someone is willing to pay for it, not market averages.
Markets in most parts of the country are closer to turning around than tailing off, with some notable exceptions. So I wouldn’t let the anticipation of further losses force your hand. However, if you’re resolved to waiting for a vigorous run-up in value akin to what we saw in the middle of last decade, your wait could be a long and futile one.
Again, don’t make the mistake of looking at the health of the overall market as the base point for your marketing strategy. Things such as comparative (or “comp”) sales, investment potential, mortgage-lending standards and interest rates are important in determining your universe of potential homebuyers. But the product on hand — your specific address — should be the chief focus.
An accomplished agent can help you identify your home’s relative strengths and show you how to emphasize them. But hire carefully.
As for the best time of year to sell your home, the stock response is still “springtime” because that’s when most buyers emerge. This is largely because a spring purchase allows families to plan moves that won’t uproot their kids from their current schools in the middle of the term.
Today, “spring” really means “late winter.” If you want to sell next year, have your house on the market and fully ready for showings by mid-to-late February 2011. Many potential buyers are starting searches as early as possible these days because they need to sell their current home as well to make the end purchase work.
Be forewarned, there will be plenty more foreclosures and short sales emerging on the market in the spring.
Another option: If you are happy where you’re living and aren’t tanking under a top-heavy mortgage, you could simply choose to sit tight for another year or two for additional clarity. After all, a home is a shelter first and an investment second.
It’s a fine line you must walk. I wish you luck on your journey.
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