Monday, 29 February 2016
Timing the Market in Selling Your Home
Don't get me wrong based on the title of this article. I'm not suggesting sitting and watching trying to catch the week you should sell your home to get the most out of it. First and most important, homes don't usually sell that quickly, and you can't just call a broker and execute a sell order.
However, there are a great many homeowners out there who have considered selling, or even want to sell, but they're waiting and watching rising prices to get a bit more at the closing table. Some are retired and would like to move to a retirement or tourist community and enjoy life. Others will be downsizing or upsizing. There are many reasons that a homeowner can be ready to list for sale if they decide it's the right time market-wise.
It's tempting to keep waiting when the news is telling you that home prices are rising in your area. In many areas this can be the case when inventories are low. Some analysts are even blaming baby boomers for keeping inventories low as they are holding on instead of selling. Supply and demand will always rule the markets, so holding on and watching rising prices makes you a part of helping your cause by holding off the market.
However, when news stories with titles like More Markets Favoring Sellers popping up in the media, it can make you wait too long. The same supply-demand dynamic that you're using in your favor right now can come back to bite you. And, it can happen very quickly. You have real estate professionals out there soliciting listings, and often they're doing so using these news stories to convince owners it's time to sell. At some point, the tide can turn.
The "real estate is local" meme is also important in this decision. Suppose for example that your home is in a popular subdivision with perhaps 200 or so homes. Right now you're holding and watching prices rise because only around a half dozen or a dozen or so homes are for sale in your subdivision. There may even be some bidding wars on the best homes.
The question is just how many listed homes it will take in your subdivision to tip the supply-demand scales. If it's a smaller subdivision, it can take just a few. In our example subdivision, past sold property data may show that a "normal" market would have 15 homes listed in your subdivision.
Suppose the eight currently listed became 15 or 20 within a week or two. The bidding wars would probably disappear, and prices would very likely soften significantly. It happens. Remember, there are others in your area doing just what you're doing, so keep that in mind and don't wait too long.
Of course, selling a home is a major lifestyle decision and shouldn't be made based solely on current prices. But, if you're in selling mode but holding, don't hold too long.