Is now a good time to sell your home?
Fall and winter are not traditionally prime time to list your property for sale, but this sweater season may prove to be an exception.
Toni Weigel, who recently listed her home in Pleasant Hill, California, said she got burned by the 2008 housing market and didn’t want to make the same mistake again. At that time, she was all set to sell her condo in San Francisco, but the market tumbled before she could close.
“I was stuck with that house for seven years,” she said.
Although experts say the 2021 housing market is quite different than it was 2008, there are still signs that activity may be slowing down a little. Here’s what’s going on in the real estate world that may make you want to sell now.
What does the real estate market say?
Now may be the optimal time to sell.
“You’ll get more dollars for your house than at any time in American history,” said Mac Cregger, senior vice president, divisional manager of sales at Angel Oak Home Loans.
Home prices have grown at a record-breaking pace for the last year plus, up approximately 16 percent nationally year-over-year by the second quarter of 2021, according data collected by the St. Louis Federal Reserve Bank. On top of that, mortgage rates have risen but remain near all-time lows, boosting buyers’ borrowing power.
Taken together, those factors — and a persistent lack of inventory — all tip the market in favor of sellers.
Kevin Kieffer, a broker associate with Compass’ EastBayPro Team in the East Bay area near San Francisco said prices probably won’t go up much more in the near-term, and there’s no guarantee that other pro-seller conditions will remain in place into the spring.
“Selling now, you’re ensuring you’re not going to be up against another quarter-point rise in rates,” he said. “If they go up you’re going to have fewer buyers in some price segments.
Kieffer added that less competition also means buyers will have to make fewer concessions to sellers. At the peak of the pandemic housing market, to win the home, many buyers were paying all-cash and waiving contingencies for inspections and other normal protections. Kieffer said those bargaining tactics likely won’t stick around much longer.
“We’re seeing things shift in the market. It’s going to be more balanced where buyers don’t have to give up everything to get a property,” he said.
Weigel, who is one of Kieffer’s clients, said she wishes she had listed her property even sooner.
“I dragged my feet and it’s not the end of the world, but I wish I’d pulled the trigger two or three months ago.”
Why you might want to wait to sell your home
Although many sellers are reaping rewards from the current hot market, Cregger said not everyone should push ahead with a sale if they don’t have another place lined up.
“Right now in the market, there’s no inventory. We still have supply and demand issues, we’ve had it some time,” he said. “You don’t want to sell your house and have nowhere to go.”
Homeowners who are looking to downsize need to be especially savvy now, because the markets that empty nesters may target has a lot of overlap with the starter home segment, where supply is especially limited.
Cregger said planning ahead is particularly important so you’re not forced to rush your next home purchase.
“These are major decisions that affect the next generation of your family,” he said. “You need to take enough time to remove emotion from the real estate transaction.”
Advice for home sellers
You may well be able to sell your home quickly and avoid that real estate commission, which averages 5 to 6 percent of the sales price. But to get top dollar the home has to be priced right and exposed to the widest possible audience, so it’s a good idea to consider enlisting the help of a knowledgeable agent.
“Talking to a real estate professional is the most important,” Cregger said. “You need to know your market. You need to know what’s selling, you need to know what’s appealing.”
Kieffer agreed, and added that working with a savvy Realtor will be even more important if you decide to wait to list your property.
“Right now almost everything sells,” he said. “Next year it’ll be more: you better be turn-key, you better be ready to go on market, you won’t have as easy a time selling a project.”
High property prices mean it will be a great time to be a seller for the foreseeable future, and if you feel ready to list now, there’s little reason to wait.
While prices may keep increasing through the spring, so will mortgage rates. And as more listings come to market, buyers will have a little more leverage when it comes to contract terms.
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