It is pretty universal that spring/early summer is an excellent time to list a house. More houses are sold that time of year. Home prices typically go up slightly in the spring and early summer and average days on the market typically goes down. And there are just more people shopping for homes. With more people shopping, it is more likely that right person will walk through your door. Of course, on the flip side shoppers also have more homes to chose from.
Should I sell my house now or wait until spring? The answer is maybe. There are several factors to take into consideration.
The housing market in your area
What is going on in the housing market where you want to sell? Is it a buyers market or a sellers market? Are homes sitting on the market for months or gone within thirty days? In a hot sellers market, you may benefit from selling in the fall or winter due to low inventory levels. (you can have your Realtor check inventory levels for you) Whereas in a buyers market, waiting until spring may be beneficial so that your home doesn’t sit on the market for months. When a home is listed on the market for too long, buyers start to wonder what may be wrong with it that no one has bought it.
It is no secret that Denver’s housing market has been hot for several years. Inventory is low and there are people moving to the area daily. Looking at statistics over the last few years, you can see that there is an increase of the average days on the market in the fall. However, don’t let this discourage you from listing your house in the fall. Average days on the market in the fall only increases by about two weeks, hardly a reason to wait six months to list your house.
Another factor to consider in the Denver housing market is whether or not the market will keep having the double digit gains that it has seen for the last few years. Many experts believe we are in for a bit of a slow down. No need to panic, most experts believe our market will continue to go up, just at a slower pace. So, if you are thinking that if you wait to sell in spring, you may be able to mark the price up by 10%, that may not be the case. Denver did see some decline this summer in median home prices. Despite these small declines, the market is still great to sell now. The market will most likely be great in spring as well, but no one has a crystal ball.
The price range of your home
Luxury homes or expensive properties with a lot of acreage can take months or even years to sell. There are so few shoppers in this price range that there is not a good reason to wait until spring. By waiting to list, you may have missed out on that shopper who would have bought your home in November.
This can also be said of an affordable home, a home that is well under the median house price in your area. In Denver right now, there are not enough affordable homes. If you are selling a home in an affordable price range, especially under $250,000 in Denver, there isn’t a compelling reason to wait until spring. However, keep in mind that your house still needs to be priced correctly. If your house is worth $240,000 and you price it at $260,000, don’t be surprised that the offers don’t roll through the door.
Interest rates are another factor to take into consideration. Mortgage interest rates have been dropping this year and are very low right now. The Fed didn’t raise rates in September but plan to raise them before the end of year. So, it is very likely that mortgage interest rates will be higher next spring. This means less buyers will be able to afford your house next spring since most buyers shop based on what they want their monthly payment to be.
I have had several houses appraise under purchase price this year. In talking to other Realtors, this has been common for everyone. One of the reasons that this is so common in this market is because we have had such aggressive gains. Appraisers base their appraisal on recently sold comps. Recent is considered within the last three months. Well, if values are going up at 1% per month, it is easy to see how a comp that is three months old is not in line with the current market. Appraisers unfortunately do not account for this. So, if a house goes under contract in October, an appraiser is looking at the summer sales prices. If a house goes under contract in spring, the appraiser is looking at winter sales.
You are much more likely to have a house not appraise in the spring.
What happens when a house doesn’t appraise? Either the buyer has to come up with the $ to make up the difference or the seller has to drop the price to match appraisal. The later is more common. Many buyers just don’t have the cash on hand to make up the difference.
It’s the slow time of year for Realtors
Fall and winter are typically slower for Realtors. This gives them more time to put into selling and marketing your home. This is true for all who work in home sales. You are more likely that the inspection and appraisal will come back in a timely manner. And the buyer’s loan officer may not have as many loans sitting on his or her desk right now either. Bottom line, better service!
For more information call Courtney at 720-476-0370.
Courtney Murphy is a Realtor serving the Denver metro area. To buy or sell a home in metro Denver, call Courtney today!