Wednesday, September 25, 2013 / by Tom Nickley
With all the buzz being created in the strengthening housing market many homeowners are asking the question "Is it a good time to sell my home or should I wait a little longer?"
The easy answer to this question for many is "yes" and consumer attitudes are strongly supporting that notion. A recent survey by Fannie May in July 2013 shows that over 50 percent of the people surveyed said they believed it was a great time to sell, which is a huge jump from 16 percent for the same month last year. Interestingly, at the same time over 80 percent of Fannie Mae's respondents believe that now is also a good time to buy. Redfin conducted a similar survey of real estate agents, which revealed that 82 percent felt it was a great time to sell.
Considering how many times I've had to answer this question, it would be easiest to just say "Yes, it's a great time to sell", but I'd like to provide a little more insight as to why it's such a great time.
Far and away the best reason to think about selling is because now is also a great time to buy. Some may say that this can't be possible because it's contradictory, but the real estate market that we are experiencing is very unique. Over the last 18 months our local housing market has seen a 54 percent increase in the median sales price of homes, but that still leaves us 26 percent below the all time high prices we saw in late 2006. Many homeowner's who were underwater on their mortgage just a couple years ago are now finding that they have enough equity to sell. This has created an ideal environment where homeowners are now able to sell their home for a profit and move up to bigger homes, better neighborhoods and ideal school districts. This is so appealing because interest rates are still at historically low levels and home prices are still affordable.
The relatively low interest rates have created a large pool of home buyers and have made it possible for home prices to continue to rise without scaring those buyers away. This won't last forever though, as we have seen interest rates rise by over 1 percent since May. A rise in interest rates drastically affects purchasing power for buyers and therefore drives down home prices.
Another factor working in favor of home sellers is the low inventory of homes available on the market. It's a simple supply and demand effect. There are lots of motivated buyers on the market that are qualified to purchase, but there are not enough homes to go around. Many owners are receiving multiple offers at or above asking price soon after the home hits the market.
So, is it a good time to sell? That is an individual question that depends on your circumstances. What are your goals? Why do you want to sell? Where do you want to move next? What type of home are you looking to buy after you sell? Is that type of home available and affordable? What would make another time better?
These are all questions that you need to answer in order to make the right decision. If you are considering selling and making your next big move, the first step is talking to a real estate agent who is an expert in the local market. A good agent will answer all of your questions and provide you with a wealth of knowledge and direction in order to hlep you make the decision that is right for you and your family.