Circumstances and market conditions often dictate when to put your house on the market, but not always. By the same token, how do you know when choosing the right time to buy? It’s not as easy as it sounds, according to Zillow Porchlight’s Brendan Desimone. “People usually take these actions because of a life event or financial issues, and the economy and real estate forecasts tend to be secondary considerations,” he says. So, what dictates the best time to buy or sell?
So before paying too much attention to real estate agents knocking on your door or reading those hand-addressed notes from them telling you people are looking for a house like yours and are ready to buy, consider a few points if, that is, you have the luxury of consideration.
Know the Changes in the Real Estate and Mortgage Industry
First, things have changed. According to Desimone, there is no longer one national real estate market or forecast like there was 20 years ago. Just because local news outlets talk about hot real estate markets with multiple offers and quickly rising prices doesn’t mean it’s happening around you. “In fact, real estate activity can vary widely within the same county,” he says. “One town can see record-breaking activity, while another 10 miles away has a glut of inventory.” So he recommends you dig deeper and get as much local information as you can. Meet with a trusted agent much earlier than you actually need to, and have him or her keep you updated on market shifts. Real estate consultants have their local market news for breakfast so you won’t need to.
If you aren’t paying cash for a home (and most people aren’t), long-term interest rates are a major factor. While historically low interest rates have been the rule for a long time, never forget that circumstances were very different not too long ago. In the 1980s, rates were in the double digits, yet people were still buying homes. “It’s not uncommon for buyers to get off the sidelines and into the real estate market when they hear news of the Federal Reserve raising interest rates,” says Desimone. “It’s very likely that when rates do start to creep back up again (and they eventually will), would-be buyers will turn into active customers.”
What Dictates the Best Time to Buy or Sell?
What about waiting until spring since it seems to be the best time to buy or sell? While it may be the prettiest time of year to list or purchase, buyers these days are looking online and searching on their phones every day no matter the season, with transactions taking place all year long. “If you have a home to sell and aren’t in a rush, consider doing so at a traditionally ‘off’ time. There will be fewer homes for sale, which means less competition,” says Desimone.
And if you’re a buyer, don’t assume a seller is desperate just because he or she listed at holiday time. There are few times of year more decorative when staging a home to sell, even if their decor is not to your liking. “It’s more important that you show your home in its best possible condition and choose the right listing price,” says Desimone. “If it’s priced right and shows well, it will sell anytime.”
Practicality in Buying and Selling a Home
And then there is solid practicality — often not the basis for buying and selling — that which makes us human. “If a real estate purchase were purely financial, then we would see every renter with savings and a solid job getting in the market,” says Desimone. He goes on to say that there are both practical as well as emotional considerations, and that while many buyers and sellers look to sell or buy over long periods of time, they often sit back and wait.
Sometimes their life terms just don’t jive with making such a huge decision — one that may involve using up much of their reserves for a down payment when an hourlong job commute doesn’t make sense if their job isn’t as steady as they’d like, their marriage is on shaky ground, or their aging parents live across the country. Most agents don’t become privy to every deep concern their buyers have, but these deep-seated issues are real and should not be dismissed.
The best time to buy or sell a home is actually not linear. The financial crisis still causes PTSD for some buyers — many of whom got caught up in it or watched from the sidelines as a friend or relative (or even a parent) lost their home. What they hesitate to digest, however, is that many of those homeowners were never truly qualified to be in the market in the first place. While lending institutions began to put more safeguards in place after this debacle, the result was a pool of better-prepared buyers when healthier markets returned. Desimone recommends, “If you think home buying is in your future, do your research. Take your time and start to get a feel for the market. Just know that nobody can predict when the right house will come along, and you can’t time a real estate market.”
Source: ZlllowPorchlight, TBWS