If You Don't Sell Your House Now, Here's Why You'll Regret it

All of the indications from the housing market suggest that selling a home will only get more difficult, and less profitable, the longer you wait to do so.

Apr 12, 2014 at 1:00PM


Even though the housing recovery is stalling, that doesn't mean it's a bad time to sell your house. In fact, nothing could be further from the truth.

Since the beginning of last year, the supply of previously owned homes available for sale has hovered at or above the lowest point in almost a decade. In February, the supply of existing homes was equal to only 5.2 months' worth of supply. That's less than half the nearly 12-month supply from three years ago.


A simple rule of thumb is that home prices will rise when there's less than a six-month supply and fall when the relationship is reversed. And that's exactly what we've seen, as prices have increased by double digits on a year-over-year basis every month since March of 2013.

The problem for procrastinating home sellers is that this could soon come to an end. While supply is still low, it's nevertheless increased for two consecutive months. And with prices at multiyear highs, it wouldn't be a surprise to see more homes flood the market with the onset of the spring selling season.


Added to this, even though mortgage rates are still half their long-run average, they too are on the uptick and could be headed in that direction for the foreseeable future. This is because the Federal Reserve is in the process of reducing its support for the economy, which, in this case, translates into higher long-term interest rates.

The culmination of these trends is likely to be twofold. In the first case, it seems reasonable to assume that the increase in home prices will moderate, if not recede, at some point over the next year or so. And in the second case, the demand for homes will slacken as mortgages get more expensive via higher interest rates.

With respect to the latter, the indications we've gotten from the banking sector have been abysmal, to put it mildly. Wells Fargo (NYSE:WFC), the nation's largest mortgage originator, serves as a fitting example. Mortgage origination volume at the California-based bank fell by 60% in the final three months of last year compared to 2012.

Needless to say, this isn't a positive development for people thinking about listing homes. And it's for this reason that prospective home sellers would be wise to pull the trigger sooner rather than later, as the likelihood things will get worse seems higher than the alternative.

Owning a house isn't the only tax "loophole" you can use
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information