For some people, a major life change such as moving pushes them to buy or sell a home in a timely manner without being able to consider current real estate market conditions. However, many people have the luxury of deciding when they are going to enter the real estate market. Although this is an ideal situation, it can be tricky to decide when it is a good time to buy or sell. Here are a few things to keep in mind that will help you make a decision.
Real estate markets vary all over the country (and world) so it is a good idea to keep an eye out for what is happening in your area. Ideally, you want to sell when there are few homes on the market but buyers are active as you will have less competition. The opposite holds true for buyers, the best time to buy is when there are few buyers and lots of houses available.
If you see any for sale signs in your current or desired neighborhood, see what those homes are selling for. Real estate agents can also give you comps to show what the market value of your home is compared to those around you, helping you to decide whether you can afford to sell your home. Buyers have it a little easier, being able to search for a home close to what they are looking for and seeing what it is priced at.
Long-term interest rates play a large factor in how the real estate market is performing since 63% of homeowners having mortgages. A period of low interest rates is great for buyers as they are able to get loans with lower rates, although it is important to also factor in closing costs which tend to be 3-5% of the loan amount. Since buyers are attracted to markets when interest rates are low, these conditions are also favorable to sellers.
Like we talked about in a previous blog post, spring has traditionally been the hot time to sell. Recent trends are showing that buyers are becoming more active earlier in the season, with January and February being two of the most active months for property showings.
Seasonal changes in real estate will vary in different parts in the country. In areas with heavy snow, it’s likely going to be a little more tricky to sell in winter. In warmer parts of the country where people flock to for winter, the colder months may be better times to sell as people are considering making a move to somewhere warmer.
Deciding to make a move in the real estate market isn’t an easy one. There are many factors to keep in mind coming from a financial perspective, but you also need to determine what is best for your family. Don’t be afraid to reach out to a realtor and talk with them about the conditions of your current real estate market .