Why is it the right time to sell a home in the US?

NEW YORK, March 29, 2010 (Reuters) – Lee Adler has been watching the U.S. real estate market for the past few years, and things have just been going up — and up.

After Adler moved to Nice, France shortly before the outbreak, it seemed like a good time to sell his empire. His single-family home in West Palm Beach, Florida, sold within a month.

“I felt like I was in the driver’s seat,” says Adler, 71, who publishes websites such as Liquidity Trader and the Wall Street Examiner. “I got no windfall cash offer at my asking price. The asking price was 40% higher than what I could have gotten a year ago.”

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The overcrowded housing market may not be good news for buyers, but it’s terrifying for sellers. The S&P CoreLogic Case-Shiller index recently reported domestic home-price gains of 18.8% for 2021, well above red-hot inflation.

For owners interested in selling or reselling, now may be the time to strike. Of course, the Realtor.com website has a very different opinion on when to list: the week of April 10-16.

The current mix of eager buyers, fewer listings, healthy prices and mortgage rates that are still relatively low (historically speaking) means many factors are tipping the scales in favor of sellers.

“Mid-April puts sellers in the market ahead of a big surge in May listings,” said Danielle Hale, chief economist for Realtor.com. “That way you can tap into a large audience of buyers who aren’t satisfied with the homes that are for sale.”

Looking ahead, there are many reasons to believe that the current market will cool down. High interest rates affect housing affordability. The average monthly mortgage payment is much higher than it was a few months ago, Hale said.

If regular buyers can’t afford homes, investors — who accounted for a record 18.4% of the market in the 4th quarter of 2021, according to real estate broker Redfin — may not be as interested. The current forecast for 2022 home-price growth is a more modest 2.9 percent, Hale said.

“Buyers got out earlier this year because of rising mortgage rates, so now is a good time to sell,” said Daryl Fairweather, chief economist at Redfin.

Some thoughts on choosing the right deal

Use spring ration

Spring is a busy time for buyers and sellers: Parents don’t like moving families after the school year starts in the fall, and many people — especially in colder climates — aren’t fans of moving in the winter.

“Start right away, because there are probably some improvements you want to make to make sure your home is in the best light,” advises Hale.

The right price

Given the massive gains in the real estate market in recent years, your eyes may be getting big with dollar signs. But if the house price is too high for the market and has been sitting for a while then it will become obsolete. So a continuous rise in interest rates could come back to bite you.

A better strategy is to “err on the side of caution and lower the price because well-priced homes are getting a lot of offers right now,” says Fairweather. “But there’s a real risk if mortgage rates go up next week, if they’re excessive and the market turns.”

Use your potential

All real estate is local, as the saying goes. If you are in an area where demand is high and inventory is low, that will work to your advantage when setting the terms and conditions of the deal.

About 15% of deals now leave out contingencies for things like inspections or financing, Fairweather says — far more than before the pandemic. Deals also close faster, about 17 days faster than the same period last year, Hale says.

Think about the next steps

Even if they sell at a very good price, the fact is that you still have to live somewhere. And rents are rising sharply along with housing prices.

As a result, a big move makes more sense for some real estate arbitrageurs—perhaps a downsizing empty nester, or someone using a home business to reduce the cost of living.

“The real winners in this housing market are those who sell in more expensive areas and get into more affordable homes,” Fairweather says.

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Editing by Lauren Young and Karishma Singh @ReutersMoney or viahttp://www.reuters.com/finance/personal-finance.

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and impartiality under the Trust Principles.

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