Should I Sell My Home Now or Wait?
The most asked question in my real estate world right now is, "Should I sell now or wait?"
Answer: It depends.
It depends on what your goals are, what your finances look like, why are you considering moving now? Do you have to sell to buy? And what a move and sale may look like for you and your family.
Sometimes the answer turns out to be NO!
Read this article from SFGate:
Housing market question: Should you sell your house now or wait?
With mortgage rates still high and a stalling housing market, you may be asking yourself when the right time to sell your house is.
Lindsay Frankel and Lauren Williamson for SFGate
July 7, 2023
With the housing market in flux many homeowners are asking themselves: Should I sell my house now or wait? Unusual market conditions and dire predictions from some economists have many homeowners asking: Should I sell my house now or wait until later in 2023?
Typically, homeowners who list their homes in the spring can take advantage of higher buyer demand, but the spring buying season has been off to a slower start than usual, with more than 20.1% fewer homes listed in March than in the same month last year, according to Realtor.com.
Mortgage rates have begun trending down in recent weeks, which could spur some activity in the housing market. Still, the average for a 30-year fixed-rate mortgage is more than twice what it was during the pandemic housing boom, and many homeowners don’t want to trade in that rock-bottom rate for a higher one.
My take on this article: I would say there are good points from each side of the equation. I am a big believer that you should not try and time the market. If you want to sell now, then why? What is your goal? What does that look like? Could you buy without selling? Would you consider holding your current home as a rental and buying the next house for your phase in life?
Consult with professionals! Asking these questions and gathering information that is relevant to your specific situation is the best way to figure this out.
Let’s dig in a bit more on this question of whether now is a good time to sell a house — and what factors to consider when making your decision.
Q. Why you may want to list your home now?
A. Inventory is low and prices are still high.
The best time to sell is typically when buyer demand is high and interest rates and inventory are low. Mortgage rates have been on a wild ride during the first three months of 2023, but they’ve begun dropping in recent weeks. As of July 6, the average for a 30-year fixed-rate mortgage is 7.22%, according to Mortgage News Daily.
Mortgages may soon be harder to get
Federal Reserve Chair Jerome Powell said in a March 22 press conference after the latest federal funds rate hike that he anticipates recent turmoil in the banking system is "likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes." Translation: It’s probably going to become harder to get loans, a situation known as a credit crunch.
Banks tighten credit in a few ways: They can impose tougher standards for getting a loan (such as requiring a higher credit score) and they may also raise interest rates, which discourages borrowers from applying for a loan in the first place. It can affect all types of borrowing, from mortgage loans to home equity lines of credit.
As a result, if you’ve been sitting on the fence about selling, it could be prudent to list before it becomes harder to get a new mortgage — both for you and for potential buyers.
Most economists believe prices will fall
Rising mortgage rates not only have the effect of making your new mortgage payments less affordable, but also shut many would-be buyers out of the market. Lower demand means less competition for your home, which affects the sale price you can reasonably hope to achieve. If these effects are widespread, when will the housing market crash?
Economists at Wells Fargo, Capital Economics, Goldman Sachs, and many other firms believe housing prices will continue the slow decline they began in early 2023. If a recession takes hold, some experts predict prices could fall as much as 30% in highly overvalued markets. Even those who are more optimistic expect the market to shift to benefit buyers. If you’re considering selling in the next year, housing market predictions indicate that selling now could allow you to capture a higher price.
Why you may want to wait to sell your home: You’re trading up for a bigger home
“If you're looking to trade up to a bigger home, this is a tough market to do that. Affordability is low, and you'll likely be paying considerably higher monthly mortgage payments on a trade up, even to move to a slightly bigger home,” says Meyer. If the monthly mortgage payments on a bigger house are unaffordable, you may have to stay put a little longer.
You’re not in any rush to sell
“Two years from now will be a better time to sell. The market and inflation will be resolved,” says Armstead Jones, strategic real estate advisor for Real Estate Bees. Many economists are expecting home prices to rebound by 2025. Mortgage rates are likely to come down by then as well, making it easier for you to afford your new home.
For most homeowners, now will be a better time to sell than later in 2023. That’s especially true if you live in a market that saw rapid appreciation in recent years. Your real estate agent can help you understand pricing trends in your area, along with available inventory and demand. Selling this spring may not be a bad idea in markets where prices are expected to remain flat or grow. But if you can hunker down and wait until 2025, you may realize even better outcomes.