Seven years after the housing market began to collapse, rising prices and thinner inventories are presenting new opportunities for home sellers. Some hot markets are even seeing multiple offers for the same property—a phenomenon rarely seen since the boom years—as buyers become more confident and seek to take advantage of today's near-record-low mortgage rates.
Nationally home prices climbed 8.3% in December from the same period a year earlier, according to CoreLogic. The increase was the largest since May 2006 and the 10th consecutive monthly gain. The CoreLogic figures include foreclosures and other distressed sales.
The gains are good news for would-be sellers who have been stranded on the sidelines since home prices peaked in 2006. Nearly one in four homeowners and renters say now is a good time to sell a home, according to a survey released this month by Fannie Mae.
Thinking about selling? You are likely to find a buyer more quickly and at a better price if you factor in local market conditions and recent sales before setting an asking price, burnish your home's Internet profile and plan ahead for a home appraisal.
Acting soon may pay off as well. While trends vary by region, buyer search activity generally peaks in March and April, while seller listings peak in July, says Jed Kolko, chief economist at real-estate website Trulia.com. "Most sellers would be better off if they pushed the process up a couple of months," he says.
Sellers could face headwinds if mortgage rates jump or the economy weakens, while the supply of homes for sale is likely to increase over the next few months, creating more competition, say real-estate agents.
If you are thinking of making a move, start by assessing conditions in your local market. Lanny Baker, chief executive of ZipRealty, suggests focusing on five measures: price changes, the inventory of homes for sale, competition from foreclosures, the average time it takes a home to sell and the gap between selling prices and list prices.
Here are some steps for sellers to consider.
1. Interview multiple agents. If you plan to use a real-estate agent, start by interviewing several contenders. Narrow your search to agents who have handled many sales in your neighborhood.
2. Don't expect to make a killing. Even after the recent gains, home prices remain about 27% below their 2006 highs, according to CoreLogic.
3. Adjust your sights to today's market. Set aside what you home might have fetched in 2006 and focus instead on what homes is selling for today.
4. Pay attention to how long competing homes have been on the market. These days, well-priced homes often sell in a week or two, while homes that languish for months are typically priced at unrealistic levels.
5. Don't overreach. Given today's thin inventories, it is tempting to reach for the stars. But if you get greedy and set the price too high, you are likely to wind up in a downward spiral.
6. Make the Internet work for you. Most home buyers and agents are now starting the search process online, which means it is important to make the Internet a key part of your marketing strategy. Begin by carefully selecting the photos you will post online.
7. Weigh multiple offers carefully. In cases of multiple bidders, you should focus not just on price, but also on terms.
8. Clean up your act. Even in a market where inventories are thin, a home isn't likely to sell if it looks shabby or crowded. At a minimum, you'll need to touch up the paint, clean the carpet and pare your possessions. Also removing some furniture so the home looks bigger helps.
9. Plan ahead for the appraisal. About 30% of real-estate agents reported that low appraisals had resulted in the cancellation, delay or renegotiation of a purchase, according to a January survey by the National Association of Realtors.
10. Houses are selling faster. The median number of days on the market for homes in January was 71, according to the Realtors group, meaning half of all homes sold within that time. That's down from 99 days one year ago.
A version of this article appeared February 23, 2013, on page B7 in the U.S. edition of The Wall Street Journal, with the headline: Is It Safe to Sell Your House Now?Posted by Breckenridge Associates Real Estate on
Leave A Comment