Should I Sell My House Now?
Q: Is 2021 a good time to sell my home?
A: While it appears to be a seller’s market, and the perfect time to put your home up for sale, there are many variables to consider before going forward. Below, we’ve outlined important points to know about today’s market so you can make an informed decision about selling your home in 2021.
Is it a seller’s market now?
According to Realtor.com, the current supply of homes on the market is at an all-time low, the likes of which hasn’t been seen in more than two decades. This can be attributed to the federal moratorium on foreclosures, as well as the months-long halt on new construction.
At the same time, demand for homes is up, as many millennials are entering their peak homebuying years, mortgage rates hit record lows and more people are working from home than ever before. In fact, in 2020, more homes were sold than in any year since 2006, according to data from the National Association of Realtors.
Naturally, when demand exceeds supply, prices will go up. Let’s take a look at some of the current trends driving this market, as shared by Realtor.com and Redfin.com:
- Home sales are up by 44% from a year ago.
- The median home price for all listings increased by 12.2% over last year for the week ending June 19, 2021.
- The national median home price for all housing types in May 2021 was $380,000.
- Homes are on the market for 33 fewer days than last year.
- In May 2021, the average home sold in just 16 days.
- 54% of homes sold in May 2021, sold above their list price.
Clearly, it is a seller’s market.
Will the market conditions last throughout 2021?
Most experts are doubtful that the current seller’s market will remain through the rest of the year. They cite several reasons for their prediction.
First, while demand for homes is currently strong, the rising prices of homes across the country are driving many buyers out of the market, thereby slowly decreasing demand. At the same time, more sellers are putting their homes up for sale to take advantage of favorable market conditions, increasing supply. Also, with the federal moratorium on foreclosures and evictions ending on July 31, more homes are expected to enter the market. Finally, mortgage rates have already started to climb upward: according to Bankrate’s most recent survey of the nation’s largest mortgage lenders. As of June 27, the average 30-year fixed mortgage rate is 3.10%, up two basis points from the previous week. All of these factors combine for a likely market cooldown over the next few months, with demand for new homes decreasing as supply increases, until the two are a lot closer than they are now.
If you do want to sell your home this year, it’s best to act as soon as possible to take advantage of favorable market conditions.
Why might it be a bad idea to sell my home now?
Under certain conditions, it may not be in your best interest to sell your home now.
First, a real estate market that favors sellers works both ways: You will be on the wrong side of the aisle when buying a new home. If you are upsizing, you will likely need to pay a lot more for your new home than you would when the market settles down. With moving costs, home repairs and improvements you may need to make when putting your home on the market, and the realtor’s commission, you can end up losing money from the sale, even with the higher price you may get for your old home.
Also, with the demand for new homes currently outpacing supply, you’ll have slim pickings when searching for a new home. You may need to settle for a home that doesn’t meet your wants, or even your needs, simply due to the lack of a better choice.
However, if you are downsizing or moving to an area that is not as in-demand as your current neighborhood, this can be a great time to get top dollar for your home and walk away with a nice profit. Before you put your home on the market, though, it’s a good idea to do some research to ensure you can find and easily afford a new place to live.
It’s a seller’s market right now, but that doesn’t mean you should rush to put your house on the market. Research the current market conditions carefully and read the points outlined above so you can make an informed and responsible decision.