Property is currently a sellers market because demand for property is outstripping supply. This is supported by a recovering economy, solid jobs market and historically low interest rates that appear locked in for at least the medium-term.
However, homeowners thinking of cashing on the current boom market should consider the consequences of such a decision carefully.
The latest figures say prices have risen 8% in the past 12 months – the fastest pace in six years. According to USA Today, this is due to folks deciding it’s time to move out of the big cities because of the impact of Covid and the work-from-home movement.
Money is cheap, too, so buyers can afford to pay more, and that also has an impact on prices in a short-supply market.
And there’s no doubt property is a great long-term investment. Swiss bank UBS says in the American market home values have risen 60% while rents have gone up only 30 % and wages just 20%.
But be careful that you don’t get swept up in the media hype. Your property is likely your largest financial asset – and your home. Lifestyle desires should always be an important influence when you want to sell, not just money. Here are my tips to assess if you should sell now.
It’s about local, not national
Regardless of the national or capital city headlines, property is all about local markets. So while a general environment of positive price growth is great news, always check what is happening to prices in our neighborhood. Have some conversations with local agents (I’d be happy to help!) and conduct research online to help you to understand how home prices in our suburb is performing and the supply and demand equation locally.
Is your home hot?
The market may be on fire, but how do buyers feel about your particular house style? While all boats float in a high tide, some property types will be more in demand than others from neighborhood to neighborhood. So if you’re selling an unrenovated and dated property in a market of all near new homes, even a hot market may not offer the dividends you hoped for. On the flip side, if you’re selling a large family home in an area demanding upgrades, you could be in luck.
Swings and roundabouts
If you sell when the market is rising, it’s highly likely you’ll also buy your next property in an upward market too. While this can be daunting, there are things you can do. If you’re worried about not being able to find a suitable property to buy, consider renting while you assess your options. Moving to a different suburb or property style – even considering a lifestyle change – can also ensure you cash in on the benefit of the higher price in your original suburb.
Watch the supply and demand curve
The economic data points to us being in a sellers market, but changes to interest rates, employment or the stock market can change this quickly and it pays to be vigilant. It also pays to ask what is most likely to happen. As we head into warmer weather, more homes will enter the market and this may help prices ease, or alternatively, make the market even more active.
What’s your life plan?
Regardless of what the market is doing, the most important thing is to consider your own personal life goals and the role that property plays in these. Your property is likely to be your largest financial asset – and your shelter, security and place to raise your family. Lifestyle desires should always be an important influence when you want to sell, not just money and optimizing the market. If this feels like the right time for you, then get into the market.
And if I can help, please do not hesitate to contact me. We can discuss local prices, buying trends, how long it will take to sell and how to maximize the value of your home.