What to Expect When I Sell My Home in an Uncertain Market
So you’ve had “the talk” with your significant other. You are considering selling your home but feel like you may have ‘missed the boat’. You’ve seen all the headlines of falling markets and the mega home sites are littered with ‘price reduced’ or ‘price improved’. Is it a good time to sell, or should you wait out the market? It can literally paralyze your decision with so much bad news and who can you trust nowadays anyway? Well, you know me. Devoid of any emotional capabilities, I always look to the stats for my answers because the numbers never lie! Combined with the stats, I’ll share with you my own personal experiences in the real estate sector.
How to Price My Home Correctly
It’s always important to price your home in line with the market. If you don’t you could be leaving money on the table. That goes for overpricing as well. In my experience, those who overprice will not only linger on the market, but they will end up with less than their comparable counterparts. Speaking of comparable properties, there aren’t any in this current market. Typically, real estate brokers and appraisers will look for similar homes that have sold in the last six months. Unfortunately, six months ago was a totally different market. Homes that are priced based on the last six months are the ones you see with ‘price reduced’ and ‘price improved’. Here’s what the stats show:
Homes are selling for between 97% – 98% on average of Original List Price. For an example, let’s say you have a $500,000 home based on comparable properties in the last six months. Well in this market, you should list your home for between $485,000 – $490,000 if you want to generate the most traffic and garner the highest net. I am seeing price reductions on average of around $20,000. So if you list at $500,000 the stats show you won’t sell until you reduce your asking price to $480,000. That’s more evidence for why it’s better to price in line with the market, rather than above the market.
How Long Will it Take to Sell My Home
Gone are the days where you put your home for sale on the market and it is pending before the day is out. Actually, on average, those days never existed. Yes, it happened with some homes, but the average sold time never got much less below 3 weeks in Lewis County. Granted, that is still a pretty quick sales cycle. So, what is the is the expected sales time now? Take a look at the graph below.
Currently, the expected sales time has increased 33%! How is that for a headline? It has gone from 18 days to 24 days. Two more things to note about this graph. The first is that the trendline is going up, but it’s not a straight shot – it appears to be tapering off. The second is that the current average days on market is still much less than it has been in 2019, 2020, and much of 2021. Keep this in mind as we look at further data points as well.
What Can I Expect Offers to Look Like
As I have mentioned before in other posts, we have gone from a heavy seller’s market to a slight seller’s market. In laymen’s terms, we have gone from a ‘give up your first born’ seller’s market to ‘you might get your closing costs paid but you’re still going to pay a lot’ seller’s market. This is excellent news for buyers! The past couple of years were not normal. They were once in a lifetime abnormal. Buyers had to waive all contingencies, pay their own closing costs, take the home as-is, and offer $50,000 more than asking to win the bidding war.
With interest rates going up, a lot of buyers have stopped looking for homes. With less buyers, there’s less competition, and fewer bidding wars. This is not to say that you won’t still see a couple offers at one time, but you won’t see the 10+ offers we’ve become accustomed to. Buyers can now include contingencies such as inspection, and I’m even starting to see buyers ask for their closing costs paid. Typically, these costs are being wrapped into the loan by making offers over asking the same amount as the needed closing costs. I am also seeing buyers getting more picky on the inspection reports. This is about how the market was prior to the pandemic and a little ways into it.
Is It a Good Time to Sell My Home
So you may be wondering, is it still a good time to sell your home? The answer is yes. Have you ‘missed the boat’? Well, yes and no. The market is different and your terms may not be as ideal as they were a few months ago. However, prices are still trending upward. Check it out below.
Taking a look at the graph, you’ll see two things of note. First, the average price is always going up and down. This means when people tell you prices went up or down this month, they are probably right. The problem with that statement is that there is no context. You want to know which direction they are trending. From this graph, you can see prices are trending upward. Second, if you sold in March of this year, you lost out on $25,000 that you would have made by selling in August.
I am willing to bet you are totally baffled right now. How can prices be going up when we see so many price reductions? It’s quite simple, really. Before the shift, you would list your home at $375,000 and it would sell for $390,000. Now, homes are being listed at $430,000 and selling for $415,000. No real estate broker is perfect and some aren’t very good at their jobs, but just like the general populace, there is a lag time for us to catch up to what the market is doing. Because many are still trying to catch up, you are seeing tons of price reductions. You are seeing BIG price reductions as well because we’re trying to get in front of the market, rather than chase it from behind.
Is it a Good Time to Buy My Next Home
Admittedly, I am baffled by buyers’ actions sometimes. This is one of the greatest times to be a buyer. Sellers are still reeling from ‘missing the boat’, yet buyers are not taking advantage on the whole. The 30 year fixed rate mortgage is currently sitting at 5.625%. While this is a whopping 2%+ higher than earlier this year, it is STILL historically low. This is where interest rates were at in 2010 when I purchased my first house.
Another great benefit to buyers is they can negotiate with sellers to buy down their interest rate. Check with your lender the maximum amount that you can buy down, but also know sometimes there are limits based on how much you put down on a down payment. However, a 2% buy down will get you back to that mid 3% range. With tons of buyers leaving the market in droves, this is your opportunity to strike as there is way less competition than earlier this year.
The Shifting Market in a Nutshell
Many people believe that the market is crashing, but that is not the case. Further, the stats simply don’t support that idea, not even close! Inventory and interest rates may be up, but so are prices believe it or not. It is still a seller’s market and appears to be staying that way for the foreseeable future because of supply and demand. However, there is less competition and buyers are able to retain their contingencies and some concessions from sellers. The market has changed. It appears to be more of what we’re used to from before the pandemic. It’s more important than ever to hire a real estate broker who has the experience and expertise to guide you through an ever changing real estate market.
If you’re thinking of buying or selling your home in the west Lewis County area, contact me today! I’d love to hear from you! Eren Millam – Managing Broker Premiere Property Group, LLC WA License No. 26933
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