It is common knowledge that a great number of homes sell during the spring buying season. For that reason, many homeowners hold off putting their homes on the market until then. The question is whether or not that is a good strategy this year.
The other listings that come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market during this season in comparison to the rest of the year? The National Association of Realtors (NAR) recently revealed the months during which most people listed their homes for sale in 2018. This graphic shows the results:
The three months in the second quarter of the year are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,520,000.
That number spiked to 1,870,000 by May!
What does this mean to you?
With the national job situation improving and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for homes right now.
If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition amongst buyers. Beat the rush of housing inventory that will enter the market and list your home today!
Want to sell your home in 2019 but now sure when is the best time? Actually, now is the best time and here is why:
• On average, more properties come on the market during April-June. If you can, avoid listing your property during these months because when selling your home, competition is not your friend. The more choices buyers have, the more they will negotiate to lower your price and/or get you to make more costly repairs on your house. Buyers are also more willing to walk away from negotiations if they don’t get their desired price because they know there are other properties to choose from.
• Right now there are buyers eager to become homeowners before interest rates go up and they projected to go up incrementally each quarter of 2019. Since inventory is still somewhat low right now, buyers are less willing to walk away from a transaction.
• If you are going to wait to sell your property at the end of the year to make more money, if you buy another property after the sale of your home, that future home is going to cost more at the end of the year than it would cost now.
• Since interest are predicted to go up, there will be fewer buyers able to purchase your home as the year progresses. The fewer buyers for your home, the less likely buyers will compete against each other to buy your home for top dollar.
If you’re thinking of making a move, call me today to start a conversation…
1) interest rates are still low (below 5%), however they are likely to rise in 2019 and homebuyers looking to get the lowest rate possible will try to make a deal sooner than later.
2) You have high equity! If you bought your home before 2015, you likely have lots of equity which you can use for a huge down payment on another home or buy a home all cash in another state.
3) New buyers are still entering the market as interest rates rise. Some buyers will lose interest in purchasing, so be ready to see occasional drops in buyer activity, however with the housing inventory remaining low, even with the rising interest rates, buyers who are ready to make a purchase will still shop for homes.
4) Selling in 2019 vs 2020. If not selling your home in 2019 means putting your home on the market in 2020, the sooner option is the best one. In a survey of economists and real estate experts by Zillow, 50% expect a recession to occur in 2020 and 24% expect a recession to occur in 2019.
Bottom Line: Real estate markets are cyclical and current patterns indicate a sudden upswing of home buying activity or prices is unlikely in the near future (Source: yahoo finance)
If your home is on the market, clear proof that it is overpriced is if it’s been for sale over 30 days and many agents and homebuyers are looking at your property online (Zillow, Redfin) yet no one calls to view your house. Time for a price adjustment
1) keep in mind that a homebuyer will see many other homes besides yours, if your home is overpriced they will find a better value elsewhere. Your overpriced home will help sell other homes.
2) A buyer willing to overpay for your property will have problems financing because your home will not appraise.
3) Your home will stay on the market for a long time and will make homebuyers ask themselves “what is wrong with that property?”. If that happens you should expect offers well below your asking price.
1) Your listing will rise to the top.
If homeowners in your neighborhood take a break from the market because they don’t want to bother keeping their property in show ready condition over the holidays, that makes four reduced inventory. Less competition means more buyers will be looking at your property.
2) Your house looks and smells amazing during the holidays.
With that nice, homey feeling, homes tend to show a lot better during the holidays, while making people feel really good.
3) Holiday home buyers are very Serious. Potential buyers who take the time to set up home tours during the holiday season are more motivated to move forward if they like what they see.
4) Families often search during school breaks. They want to find the right property, have stress free negotiations, and get their families settled before school starts up again in January
5) It can be easier to close a transaction in December. Buyers can often get their loan processed and approved faster in November or December then they would in traditionally busy spring months.
# Mortgage rates will continue to rise in 2019. Every time interest rates go up, buyers lose a little purchasing power, but the barrier maybe more psychological than financial. Buyers are starting to push back, they are saying “enough”.
# Homebuyers will have more negotiating power and sellers will need to make more compromises. Expect bidding wars to become less competitive, and price reductions to become more common.
# As price gains slow, home values will still appreciate at 2-3% depending on neighborhood
# Upscale neighborhoods will soften while demand for entry level housing remains high (source: forbes.com)
Thinking of selling your home? Let’s talk! 323-717-2262
# Los Angeles home sales declined by 24 percent year over year in September, with all local communities except the Eastside showing a decline in the third quarter, bringing 2018 housing market activity to 11 percent below last year.
# Following a strong start for higher-priced sales at the beginning of 2018, sales activity slowed in all price ranges in the third quarter, and sales of homes priced higher than $1 million are now trending with 2017 activity.
# Inventory is also 10 percent below last year’s levels, suggesting about 1,100 fewer homes on the market. South L.A. posted the largest inventory drop, down by 34 percent, followed by a 27 percent decline in Downtown L.A. and a 24 percent decrease in Foothill Communities.
# Despite slowing annual price growth of 2 percent, almost half of Los Angeles communities posted appreciation of more than 10 percent — particularly in Northeast L.A., Foothill Communities, Eastern Cities, and Beverly Hills.
# Price reductions rose by 3 percentage points, from 21 percent last September to 24 percent now. More reductions were seen in greater Malibu, Foothill Communities, the Eastside, the West Valley, and the South Bay.
# The rebalancing between buyers and sellers is being driven by affordability constraints and buyer fatigue.