Just like any product or service that gets bought and sold, the housing prices in the United States depend on supply and demand. As it goes, when the supply is high and demand is low, prices go down. On the other hand, when supply is low, and demand is high, prices go up.
That’s what led to the housing market boom in 2021. A lot of people wanted to buy a house but there wasn’t enough houses for sale. Naturally, prices have skyrocketed.
Today, the supply situation is better. Across the US, there are 244,000 houses for sale in December 2022 than there were in December 2021. However, even though the supply situation has improved, it is still an issue. The number of homes for sale in December 2022 was 38.2% lower than the average from 2017 to 2019.
What does this mean?
For sure, housing prices are still on the up side although they have dipped for a bit the past few months, they are still up year after year and they will still go up because the supply is still low.
Here is what you need to remember though; you should never decide to sell your house based on the state of the housing market alone. Market conditions play only a part and is not even the most important. It is your personal situation that needs to take the center stage. The best time to sell your home is when the market and your individual situation lines up.
When to Sell Your Home
When then is a good time to sell your home? Here are signs when you should sell your house:
- It will improve your financial situation
As long as selling your house will not, in anyway, hurt your financial situation, you are probably in a good spot to sell.
For the majority, improving their financial situation is the main reason why they sell their homes. A popular way to make that happened is downsizing.
Imagine you own a larger home worth $485,000, and you have $200,000 worth of equity. If you downsized by selling that house and buying a smaller one for $300,000, it is more likely you’d cut your monthly payment in half and nearly $200,000 closer to paying off your home and being debt-free.
Sometimes, people are focused in paying off their debts – student loans, credit cards, car payments etc.. that they sell their house to make it happen. They use their equity to pay off all their debt, and they rent while saving up for a downpayment for the new house.
There are lots of what why selling your home improves your financial situation, and that is a good reason to sell. Take note, if selling your house will make your financial situation worse, by sinking you further into debt or increasing your payments – it is better to stay put.
2. You have a new place to live
Before packing your bags and heading out, it is a good idea to make sure that you have a new place live, correct?
It is a good move to not buy a new house before selling the one you are currently living in. If it takes longer than you expect for your current home to sell, doubling up on mortgage payments will greatly affect your general budgeting.
Luckily, there are great options to bridge the gap when you are buying or selling at the same time so you don’t end up paying 2 houses at once. You could rent on a short lease term or, if possible, move in with the family for a bit.
3. You’ve got equity on your side
For most homeowners, being ready to sell your house comes down with a big factor, which is equity. What is equity? Equity is the simple amount you have left to pay on your mortgage subtracted from the market value of your home. The difference is your home equity.
How much equity should you have before you sell your home you might ask? At the very least, you want to have enough equity to pay off your current mortgage, plus enough left over to make a 20% downpayment on your next home.
Here is the deal, selling your home when you have negative equity (also known as a short sale) is a not good of a deal, breaking even on your home sale is not even better. If you are in either situation, you should not sell your house unless you are trying to avoid bankruptcy or foreclosure.
4. The market works in your favor
No one can predict how the housing market performs in a span of time with 100% accuracy. But, you can have a good idea of what you might experience when selling your home.
A good real estate agent will be able to help you understand the market situations and works better if you are asking the right questions.
If supply is decreasing, competition among buyers might be higher when your home goes into the market, which means that there is a chance that you can sell your house for more money and have plenty of offers to choose from. On the other hand, if the housing supply is increasing, you could be competing for your buyer’s attention.
5. You are emotionally ready to sell
Just because the numbers do tell you to sell your home, doesn’t mean that it is the best time to do so. Do not forget, selling your home is an emotional issue as well. Before hanging the for sale sign, take a moment to ask yourself the following questions:
- Am I committed to keeping it ready to show for possibly weeks or months?
- Am I ready for challenging negotiations over what buyers are willing to pay for my home?
- Am I ready to move out and leave the place where my family have memories?
Do not get me wrong, we are not trying to talk you out of selling your home! I just want you to be completely ready when you decide to move on to the next stage of your family’s life.
If you are ready to sell, what are you waiting for? Contact us now!