by Maurie Backman | Updated July 19, 2021 - First published on July 1, 2021
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Should you sell your home now, or is it better to wait?
Selling a home is stressful enough without a pandemic in the backdrop. And while coronavirus cases have declined in recent weeks with the rollout of vaccines, the pandemic is far from over.
In fact, welcoming people to come view your home may be outside your comfort from a health and safety perspective. But if you can get past that, from a financial perspective, now is actually a great time to put your home on the market.
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Mortgage rates continue to sit near record lows, which is driving a lot of buyers to go out and bid on homes. There's just one problem, at least on the buyer end -- there aren't enough homes to go after. In turn, that drives home values up. As a seller, you can capitalize on that.
In April, the number of homes for sale declined 42.2% from a year prior, according to RE/MAX. All told, that amounts to just a 1.1-month supply of available properties.
For context, it takes more like a four- or five-month supply of homes for a more equalized housing market -- one where neither buyers or sellers have a notable advantage. So as a seller, limited inventory can really work out in your favor.
Not only might limited housing inventory allow you to command a higher sale price for your home, but your home might sell very quickly. In April, it took an average of just 32 days on the market for the typical house to sell. In April of 2020, it took 46 days.
Meanwhile, the median home sale price rose to $320,000 -- a 5.9% increase from March. If you list your home today, you might walk away with a serious profit.
The usual crunch of springtime housing inventory never hit the market this year, so as a seller, you currently have less competition to deal with than usual. On the other hand, if things continue to improve as far as the pandemic goes, more inventory could enter the market -- and the more competition you have, the less of an edge you give yourself.
If you've been thinking about selling your home, you may want to get moving now, before too many property owners get similar ideas and a wave of listings hits. That said, if you sell your home, you'll still need a place to live. And since home prices are inflated, what you gain in the sale of your home, you might lose when you have to overpay for another.
Also, remember the limited number of homes on the market we kept talking about? If you sell your home and become a buyer, you'll struggle there, too. You may not find a home you like, or you may have to settle for a neighborhood that isn't really where you want to be.
As such, if you're going to sell your home, you may need to prepare for a battle in buying a new one, or otherwise plan on renting for a year or two. That way, you can pocket the proceeds of the sale of your home, wait for the market to cool off, and then purchase a place of your own at a more affordable price point.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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