Is Now A Good Time To Sell?
In short, yes, it’s a great time to sell. With very low inventory and high buyer demand, homes have never seen such significant value increase in such a short time. Homes, on average, have appreciated in value (a.k.a. gone up in value) by over 17% nationwide! Historically, the appreciation is slightly over 3% per year so this has been a whopping increase of over 5 times the yearly average! So your home is worth a lot and with such buyer competition, you will have the upper hand in all negotiations on contract terms and repairs.
Click to Listen!
The Maroon Group Podcast
Now, let’s be honest. It’s rare that someone sells just to sell. Oftentimes, we sell because we want to make a move to up- or to down-size. Selling becomes the necessary hurdle to jump before we can purchase that new home. So, is now also a good time to buy? Once again, in short, yes. Interest rates are extremely low and it has never been as cheap to borrow money from a bank. The biggest challenge buyers run into is the competition in the market. There is no way to avoid competition as a buyer, after all if it’s a great to sell it’s going to be competitive to buy, and if it’s a great time to buy, it’s going to be competitive to sell. You can not have it both ways.
However, let’s just do some quick math. Because the market is competitive, let’s say you will sell your home and make $20,000 more than you would have a year ago but then when you go to purchase, the home you are buying is also $20,000 more than it was a year ago. How does the profit of your sale compare to the cost of your purchase. If you are like the vast majority of Americans who will be financing their purchase and not simply buying in cash, an extra $20,000 in a price will cost you roughly $100 per month. Not insignificant but not significant. Whereas, on the seller side you are actually profiting $20,000 more in your pocket.
So, it is not truly a comparison of $20,000 vs. $20,000. It is a comparison of $20,000 in your pocket vs. $100 out of your pocket every month. I don’t know about you, but I would rather take that $20,000 and save it, invest it, whatever than save $100 a month. PLUS to break even it would take 200 months or 16.67 years before that $100 a month even equals the $20,000 in your pocket. In 16 years, I’m pretty sure you can make more money where that $100 a month is no longer significant.
As a seller, we can also protect you from selling your home without finding another home by installing a contingency clause in your contract saying you will not sell your home until you find a suitable replacement home. This is very common and a question I am asked many times. It is an understandable fear that you would sell your home and be homeless before you find a new place. Do not worry; a good agent knows how to protect you.
Now, I know some of this is math, but math tells a good story. The bottom line is, now is a great opportunity to maximize the value of your home and then take advantage of borrowing money cheaply from the bank. It is a great time to sell and a great time to buy.