Should I sell my house now or wait?
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- Late spring and early summer are generally the best times to sell a house.
- Traditionally, low mortgage rates and short supply make it a good time to sell.
- While today’s rates are still high, low inventory is keeping sellers in the driver’s seat in most markets.
If you’re considering selling your home, it’s critical to understand the current real estate market dynamics. The volatility that dominated the market in recent years amid pandemic-related pressures is starting to ease, but that doesn’t mean there aren’t still challenges.
For one thing, mortgage interest rates are ticking upward again after a brief decline and stood at 6.66 percent as of late March. That reality is making mortgage payments increasingly expensive and driving more than a few potential buyers to the sidelines — certainly not ideal if you’re on the selling side of the equation. At the same time, February’s median home prices saw a year-over-year decline for the first time in more than a decade, according to the National Association of Realtors (NAR).
But the popular adage that all real estate is local continues to hold true, meaning there are plenty of places around the country where buyer demand and prices both remain strong. And with housing inventory still at an extremely low 2.6-month supply, per NAR, the nation overall is still very much a seller’s market. So is 2023 a good time to sell your home? Here are some insights to help you sort through the question.
Is now the right time to sell my house?
If popular opinion is any guide, 2023 may still be a good time to sell your home despite the evolving market dynamics. According to Fannie Mae’s February 2023 Home Purchase Sentiment Index, more than half of respondents still feel it is a good time to sell.
“Right now is definitely a good time to sell,” says Jade Lee-Duffy, a Realtor with TXR Homes in San Diego. “Depending on where you live, housing demand has most likely jumped. In my market, San Diego, demand has recently gone up 28 percent. And housing inventory is still historically low — about half as many homes are on the market now as compared to pre-COVID times.”
Of course, deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and personal, before putting your home on the market.
Your local market dynamics play a large part in whether it’s a good or bad time to sell, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida. “In some areas, selling now is the right thing to do because prices are still climbing — or, at least, are not yet falling,” she says. “In other markets, prices are falling fast, so it might be best to wait to sell until 2024, when the market correction hopefully stops and interest rates come down and stay down, which will spur sales once again.”
When is a good time to sell a house?
Historically, spring and summer are usually the best times of year to sell a house. Realtor.com recently went so far as to specifically declare the week of April 16–22 the best time to sell. But beyond seasonality, there are many factors that might make selling your home a wise decision. Often the reasons are based on financial calculations, cost of living expenses and other considerations, but there may also be other factors that make selling your home the right choice. These include:
|If rates are low||Low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.|
|If supply is short||A shortage of housing inventory also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell much faster.|
|If you’re ready to downsize||Downsizing may be a more budget-friendly choice than maintaining a larger, costlier home. For older homeowners, downsizing may even be a necessity. “If you can’t handle the stairs anymore, or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a broker with Lamerica Real Estate in Los Angeles.|
|If you need to relocate||If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your next place, selling may be unavoidable. “The time to sell is when you need to sell,” says Severance. “It’s a no-brainer to sell if you have somewhere to go.”|
When is a good time to wait?
There are many reasons why it may make more sense to hold off on listing your home for sale. Here are some common factors that might make prospective sellers hit the pause button:
|If rates are rising||Rising mortgage rates, as the current market is experiencing, often mean fewer buyers and a smaller pool of buyers who can afford the price you want. Selling a home isn’t free, so if you can’t maximize your price, you might decide to wait.|
|If you’re upsizing||The cost to purchase a new, bigger home may be unaffordable, particularly in a hot market. Don’t get in over your head — take the time to be sure your finances can actually accommodate the type of home you want.|
|If you’ve recently refinanced||If you recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money by doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.|
|If your home is in poor condition||Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible. “If the home is in disrepair or there’s an unfinished project, you are less likely to get a good amount,” says DiNenna.|
|If you have no game plan||If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait. “It doesn’t make sense to sell if you don’t know what your next play is,” says Albert. “Where are you going? Where is that money going to be spent? If you don’t have a plan, then you shouldn’t sell.”|
What if there’s a recession?
According to Bankrate’s Fourth-Quarter Economic Indicator poll, the U.S. economy has a 64 percent chance of contracting in 2023. Only two experts polled said that a financial downturn can be avoided, and one said the odds of a recession are 100 percent.
So, should you sell your house during a recession? Or even just before one? The answer really depends on your personal circumstances. “If you’re concerned a recession is coming, it’s generally better to sell now instead of waiting,” says Lee-Duffy. However, “selling during a recession might be beneficial if you’re looking to downsize or rent. This could cut your overall costs, and you could put the proceeds into a retirement account, go on vacation or invest.”
Remember, recessions typically bring with them job losses and general belt tightening, which can severely limit the number of house-hunters looking to buy. More buyers will be able to afford a home, and qualify for a mortgage, before the recession becomes official than after.
Tips to sell your home
If you’ve considered the pros and cons and decided to put your home on the market, here are some steps you can take to get the best deal possible.
- Find a good agent: The advice and guidance provided by a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market. Take the time to interview several candidates, and ask friends or family members to recommend agents they’ve had a good experience with. “A Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light,” says Jen Horner, a Realtor with Masters Utah Real Estate. “The right preparation will allow sellers to feel their home has solid representation.”
- Make repairs if needed: To help land the best offer for your home, make necessary repairs. “Sellers need to understand that they only have one chance to make a first impression,” says Horner. “Your Realtor can walk the property with you and make suggestions for preparing your home to hit the market.”
- Declutter the interior: You should also make an effort to tidy and declutter your home, allowing prospective buyers to see the living spaces clearly. “Less is always more,” says Horner. “The fewer items in a room, the larger it will feel. Remove any personal items. Position furniture to make the layout of the room flow and remove any unnecessary furniture.”
- Add curb appeal outside: Your home’s exterior is another part of making a good first impression, and it’s worth freshening up the curb appeal before buyers see it. That can include improving or upgrading landscaping and walkways, or even be something as simple as a fresh coat of paint on the front door.
- Invest in home staging: Staging a home for sale, particularly if it’s vacant, can help prospective buyers visualize how rooms can be used and present a more inviting and polished image. “Staging can help show the buyer how to optimize the space,” says Horner.
Alternative ways to sell your house
If you need to sell your home quickly and don’t have time for the often-lengthy process of a traditional sale, iBuyers and cash homebuying companies may be worth considering.
An iBuying company is essentially an instant buyer. These companies, which operate mostly online, typically make an offer on homes within 24 to 48 hours. Once you accept an offer, the entire process can often be completed within a few weeks. Opendoor and Offerpad are two of the biggest iBuyers.
Similarly, cash homebuying companies also allow you to sell a home fast. These companies make all-cash offers and may be able to finalize a sale in as little as one week, and they often handle all of the required closing paperwork for you as well.
Before proceeding with either method, though, it’s important to understand one major downside: In exchange for their speed and convenience, you sacrifice profit. Both types of companies usually offer much less money for your home than you would get through a traditional sale.
Deciding to sell your home, whether now or later, is a major decision that requires careful consideration. Your future plans and goals should be a significant part of the equation, as well as your financial needs and the realities of the current market. If you decide to proceed with listing your home, working with an experienced Realtor is a smart move. A real estate agent who knows your community well can help you price a home effectively, which will increase the chances of a quick and smooth sale.
Selling your current house and buying a new one at the same time is complicated, but it can be done. Successfully navigating this process requires more planning and the help of a skilled real estate agent and mortgage professional. Negotiating closing timelines effectively is critical, to ensure that you have someplace to live if the old house sells before you can close on a new one. You can look into a rent-back agreement, which allows you to remain in your current home after closing for a short time and pay rent to the new owner — or you may even need to line up temporary housing for that in-between time.
Deciding whether it’s a good year to sell a house really depends on your personal circumstances and the specific dynamics of the market in your area. “The current national real estate market is what we call a transitional market, meaning that it is not sure what it wants to do — whether to go clearly up or clearly down,” says Katie Severance, a Florida Realtor. “So, it depends on where you are selling. Interest rates are up, causing prices in some markets to go down, and yet in other areas, prices are still climbing. It’s all geographically driven.” If you need to sell now, whether it’s a good time or not, an experienced local agent can guide you through the process.
When selling a home, your net proceeds are your profits after paying all associated costs — the amount of cash you end up pocketing after all fees, commissions, closing costs and other expenses are taken care of.
If you make a substantial amount of money on the sale of your home, you may be subject to capital gains taxes. The exact tax rate you’ll pay is impacted by various factors, including how much of a profit you make, how long you’ve owned the home, your marital status and more. You’ll also have to pay any outstanding property taxes still owed at the time of sale.