The decision to sell a home is a big one -- whether you're thinking of unloading an income property or looking to sell a home you live in yourself. Not only do you have to find the right real estate agent, but you also want to make sure you're listing your home at the right time.
If you're contemplating a home sale, you should know that now's actually a really good time to move forward. And if you wait a year, you could end up with a lot less money in the course of that sale.
Sell while the competition is low
Any time you don't have enough supply of a given commodity to meet demand, the price of that commodity tends to rise. That's precisely why consumers have had to deal with such rampant inflation over the past year and change.
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Last year, Americans were flush with cash due to stimulus policies at a time when supply chains were battered. That did the trick of driving the cost of just about everything up.
Similarly, right now, the housing market sorely lacks inventory. In September, the supply of unsold existing homes declined for the second straight month to 1.25 million, according to the National Association of Realtors. That represents a mere 3.2-month supply.
Meanwhile, it generally takes a four- to six-month supply of homes to adequately meet buyer demand (with a four-month supply really being on the low end). So if you sell now while the competition is low, you might benefit by virtue of that alone.
Then there's a potential recession to think about. Experts have been cautioning that the economy could enter a serious slump in 2023. If that were to happen, and unemployment levels were to rise, it could push more buyers out of the market, thereby narrowing the gap between supply and demand and leading to home price drops. That's just another reason to list your home now rather than wait things out a year.
Now you may be thinking, "But mortgage rates are so high right now -- shouldn't I wait until they start dropping?" Lower mortgage rates might indeed attract more buyers. The problem, though, is that we don't know when mortgage rates will start to come down.
The Federal Reserve isn't done implementing interest rate hikes, so we shouldn't expect the cost of borrowing to decrease anytime soon. And we definitely can't say with any amount of certainty that mortgage rates will be lower at this time next year.
Don't delay
The decision to list your home isn't one you should dive into on a whim. But if you've been seriously contemplating a home sale and have reached the decision that it's the right choice, then when it comes to timing, now is probably better than a year from now. So if you want to walk away with as much money as possible from your home sale, get yourself an experienced real estate agent and gear up to list your property before 2022 comes to a close.
