With so much happening in the real estate market, many are wondering, should I sell my house now or wait? There has been a ton of anticipation for the summer of 2022. Many COVID restrictions are beginning to lighten and the world feels more normal than in many parts of the past 2 years.
The real estate market has been on an upswing since the pandemic started that many did not predict. Housing prices have continued to rise without much delay.
Interest rates were forcibly set low by the Federal Reserve to encourage more spending within the market. This plan worked, as many first-time homebuyers jumped into homeownership and bought their first primary residence.
Up to this point, it has been a seller’s market. Low inventory and low interest rates have driven the demand for houses, making it fairly easy to sell a house. Now with interest rate hikes on the horizon, homeowners are wondering when the right time is to sell.
Here, we will review what to expect if you plan to sell your house this summer or wait.
Metro Detroit Real Estate Market
Similar to many other real estate markets, Metro Detroit has held up fairly well throughout the pandemic. Prices have generally increased over the past 2 years, especially in Western and Northern suburbs, like Novi, Livonia, Wixom, and Oakland.
With lower inventory than in past years, it has been easier for sellers to successfully find buyers for their properties. According to Redfin, the property values decreased slightly in February but bounced back with a vengeance in March of 2022.
The question remains, will this continue for homeowners looking to sell their house in Detroit?
Detroit, like many other large metropolitan areas, has a tendency to get hit hard during turbulent economic times. High unemployment rate creates stress throughout parts of Michigan that make it difficult for the local economies to thrive.
National Trends in the Real Estate Market
Many markets are beginning to experience a plateau in pricing. Realtors are finally forced to reduce the price of certain listings after being used to getting multiple offers over the asking price.
Major cities like San Diego, California are experiencing exactly this. Higher interest rates, combined with the war in Russia, are deterring more buyers from jumping into the market.
Similarly, on the opposite coast in Pennsylvania, homeowners are experiencing the same thing. People trying to sell a house in Pittsburgh have found that there is less demand than in previous spring seasons. Seeing this across multiple markets is making people skeptical if they should sell their homes this summer or wait.
There was an analysis published the in early spring that stated technology cities — due to increased interest rates and financing — would be hit the hardest. Since these tech companies cannot rely on cheap financing to grow, many of them will start to lay off employees. As a result, unemployment will hit these cities harder.
The question then becomes, “Will these cities, along with interest rates and a Russian-Ukrainian war, pull down the entire real estate market?”
If You Do Plan to Sell This Summer
There is unfortunately no crystal ball that tells us exactly where interest rates will be in the summer and how much demand from homebuyers will exist.
These two factors, combined with the existing inventory at that time, will largely determine the demand for real estate. If you absolutely need to sell your house soon, regardless of the world events going on, it may make sense to do so this summer.
There is always a possibility that real estate prices can decrease after (or even before) the summer. We may not experience the huge demand that we saw the past few years throughout the pandemic.
For those that still plan to sell their home this summer, it’s vital that you find a professional real estate agent that focuses on you. They will bring experience to the table that can help you successfully sell your home regardless of the market conditions.
There are various marketing strategies that realtors can use that help generate interest even during tough times. It’s important that you get started soon, as the summer approaches us very soon. There will still be buyers ready to jump at the next listing. Don’t miss out on those opportunities to sell your home this summer.
Cost of Waiting to Sell
The real estate market has been on a general uptrend since the last crash around 2009. There are costs that come along with holding real estate. One of the largest costs, which is tough to precisely estimate, is opportunity cost.
Again, if we had our crystal ball and knew when the market would drop and then bounce back up, we would all be much wealthier. If this summer yields high real estate values but is then followed by a long bear market, homeowners will be missing out on potentially huge gains.
Equity is only equity until it isn’t. It’s an intangible number until you actually sell your home and capture that equity.
If you find yourself stumped with what to do with your house this summer, ask yourself this: what is my long-term goal. For many homeowners, they plan to live in their current home for +30 years and raise a family. It’s safe to assume that in 30 years, their property will be worth more at that time than it is now.
For homeowners that are considering selling in the next 1-2 years, there is no guarantee that their property will be worth more at that time than it is now and will be this summer. Clearly define what your goals are. That will provide clarity for this decision on whether to sell your home this summer or wait.
Also, make sure that your budget can withstand the holding costs associated with owning property. For example, mortgage payments, utilities, HOA fees, taxes, and insurance payments are all expenses that come along with holding on to a home. Home sellers that live in the home, this is no problem.
However, if you are an investor or someone who recently inherited a home that is vacant, these costs can add up.
The Need To Move
Life can be complicated. There are times and situations when you have to disregard the money on the table and make the decision that is best for you simply because it is. Even if it might be more expensive to move, it may still make sense for you at a certain time in life.
If you had more kids (or pets), you may need to upsize your current home. Many people sell their homes to move because of a new job. Plenty of people experienced that throughout the pandemic, as employees were granted the option of working from home. This enabled people to own homes where they wanted to, not where they needed to.
Whatever life has in store for you, make the decision that is best for you and your family. Typically, the money always follows after that. Evaluate your current situation when deciding if you should sell your home this upcoming summer.
Conclusion
So whether or not you should sell your home now or wait comes down to your finances and personal preference. There is more risk and cost in the real estate market right now, but that doesn’t mean it’s a bad time to sell.
With effective strategies and a professional real estate agent, you can get great results whatever the market. Even if it doesn’t make financial sense to move, you may still wish to move. Life is more than money. Sometimes you need a bigger space and can’t wait.
