The best magazine
To Sell Or Not to Sell? That is the Question - Weighing the Opportunities in Selling Your Home Today
However, contrary to most homeowners out there, these folks are in an equity position with regards to their home; they are not in distress or facing foreclosure, they are simply weighing out their options.
With regards to what the market is doing, is it a good time to sell right now? The answer is that it depends.
Taking San Diego as a general barometer of real estate health, what we have is a bifurcated market that is segmented in activity with respect to the lower and higher end.
As you increase home values above $500,000 there are seemingly less and less buyers out there willing to enter the market.
For one, most people who could be approved at a higher amount a couple years ago are unable to due to stricter standards with lending.
Other buyers choose to opt for a lower price since we all have had a healthy dose of humbleness and (hopefully as a nation) are moving in the direction of living within our means.
I have clients that are looking to buy homes at the above $500,000 price point, and they are patient and stringent in their needs and wants.
They can hold out and find a place that works on all (or most) levels.
It is a buyer's market as you get closer to $1 million in price, but there are still buyers out there.
Don't misunderstand; this is not the 2007 and 2008 market where we were seeing very little activity no matter what came on the market.
If a well priced and well liked home becomes available, there will most likely be a multiple offer scenario.
The best advice would be to be prepared, know what you like and be ready to pounce once the opportunity presents itself.
Negotiation and reduced prices are a commonality for homes that aren't immediately put under contract, so when it comes to selling your home at the higher end, it has never been more important not to overprice your home's value.
Utilize the expertise of your Realtor professional to accurately assess the value of your home and consider selling it for slightly less than that value.
For a buyer to move on a property in this part of the market, the buyer must perceive a good deal to proceed through, and price concessions certainly do the trick.
For the lower end of the market (below $500,000) activity is still strong and there are several buyers out there.
I have seen a kick-down in activity levels since the first time homebuyer credit expired, and I have seen an uptick in new listings, and from most accounts the real estate community is expecting a good deal and constant flow of foreclosures and short sales to continue on for the next 18-24 months.
All of these variables point to further stabilization in price because although there is still a good deal of distressed inventory that needs to change hands, there are buyers out there ready to pick these properties up.
Demand and supply are more in equilibrium than they were earlier this year, so if one were to sell their property today at the lower end of the market, it would not be normal to expect a dozen offers in the first week like it has been in the past 6-10 months.
Of course, if an amazing property that is well priced does come on the market, again, the buyers are out there and they will come in droves.
However, if the property has its "issues" and its price is not borderline amazing, it will not be immediately snapped up like it has in the recent past.
For a seller at this price in the market, doing the little things to make your home stand out from the competition is key.
Lean on your Realtor professional and get the best tips and tricks that are low-cost and will make your property shine as best as it can.
If it looks good and it is priced well, it will certainly sell.
If it is overpriced and dirty, expect it to languish on the market.
There are similarities for a seller in the lower and high-end market, and they have to do with making sure that your property is priced right to market and that it shows well.
As a seller you are competing with distressed property, and although the distressed property doesn't always show well, it is priced to move and at a good enough price, most any buyer can overlook condition and cosmetic issues.
The main differences between the high and low end are the sheer number of buyers at the lower end compared to the high end.
It is certainly harder to sell a home above $750,000 today.
A seller at this price point has to do a lot to get their home sold because the market activity is languishing at this price point.
As we move further up in price point into the million-dollar plus range, this is even more evident.
In many cases, sellers must accept significant or massive concessions on price or terms to get a buyer to purchase their property.
So why would you even consider selling your home now? Well, consider the future.
Ask yourself if you think that your home's value is going to dramatically increase over the near future (within the next 3-5 years).
If you were remotely considering selling your home, and you think holding off for right now is the better move, how much more do you think your property will increase in value in that time period? Will it go down in value? What is the cost/benefit? Is there a big difference at all? Is now a good opportunity to move up? These are the questions that will get the answers that you need to determine if it is a good time or not for you to sell.
I cannot make a blanket statement because it always depends on your life situation and your overall wants and needs.
However, I have been advising clients that their best move right now may be to sell.
I don't see real estate values increasing dramatically anytime soon.
They are stabilizing, and this is a great thing, and we can expect modest growth and appreciation in the lower end of the market and this will continue for the short term.
For the high end of the market, the picture is much less clear.
I can see a flat-line level of growth or even depreciation and reduced real estate values for the short term for high-end and ultra high end luxury real estate.
If one was considering selling their home at the high end, they need to take into account a potential reduction in real estate value and then consider potential to appreciate back up to current values (and hopefully higher so) when selling in the next 3-5 years.
So timing may be on your side when it comes to selling your home at the high end of the market.
And for the low end of the market, timing may not matter at all because there won't be an exceptional change for at least some time, but what else matters in this decision? Interest rates I believe it is a widely held consensus that in the future we will be experiencing high levels of inflation.
This is due to the extraordinary levels of debt that the US is taking on.
The most common way to address inflation is to increase interest rates.
Interest rates for home mortgages right now sit at historically low levels.
They are stupidly low, and are staying that way in a prolonged manner due to what is happening in Europe and the gulf right now.
Everyone is basically expecting these interest rates to increase, so when you are selling your home in a year or two, and interest rates have gone from sub 5% to around 6%, that's a difference in monthly cost for the average buyer of approximately $400 a month, $4500 for a year, and $143,000 for the life of a 30 year mortgage.
That 1% makes a huge difference, and that's only 1%..
..
what if it goes up more than that? This will weigh into a buyer's mind in the future at the time they are looking to buy, and it will cause a buyer to step down in their purchase price range.
Your place was affordable (today) but in a future environment of rising interest rates, it is no longer the case and a pool of buyers will recede onto other less expensive homes.
When the opportunity is bountiful and it is easy to do something today, it is also very easy to have indifference and do nothing about it.
However, when it is hard to do something that was once easy, you are kicking yourself as a result for not taking action when you could have come out ahead.
For sellers in this market, at both high and low ends of the market, there is a real opportunity out there for you.
The move up market has never looked so good! The higher end of the market is sluggish and the lower end has a good deal of activity.
That means for those of you planning on moving up into a bigger home, this is the best time to do so.
It is easy to see that you would be able to sell your current home for a fair price in a good amount of time and be able to take a sizable haircut off the would-be price to the larger and more expensive home.
Add to this the ability to finance this home at an amazingly low loan rate, and you can see the inherent opportunity for the move-up buyers out there.
For those just looking to get out, there is opportunity cost left on the table for not acting now vs.
waiting in the form of stagnant overall growth (close to zero net change) in value and a high potential for interest rates to increase for the would-be buyer in the future.
When you also take into account all the carrying costs of your property, it may just be that the right thing for you to do would be to consider selling your place now in order to take advantage of the activity out in the marketplace.
All in all, the word is opportunity.
It's out there for those ready to take action.
Be sure to consult your Realtor professional and be prepared for some work to get your home in pristine condition.
For more information on this topic and on what you can do to help sell your home, consult my website: http://www.
michaeljwolf.
com or feel free to contact me personally.
I wish you the best of luck and the best of fortune for all of your real estate ventures.
Source: ...