Deciding it’s time to sell your home is a big decision. While housing market forecast and conditions play a big role in answering this question, the seller’s personal circumstances are just as important when answering it. But, for home sellers who are ready to move, or need to, 2023 will remain good times to sell a house.
Recent market volatility has led to conversations about a market correction and fears that a recession is looming and that home prices will drop. However, the market outlook continues to be bright for sellers, propelled by a decades-long inventory shortage and a growing pool of Millennials who are getting ready to buy their first home.
Despite the noise about the housing market, most real estate professionals agree that now is still a good time to sell your house.
Some people may think a crash is coming, but Deitrich Fields, an Orchard Buying Advisor based in Dallas Fort-Worth says, “Everybody has different opinions but based on what I've seen, home prices are just fair.”
Fields is getting at the crux of current housing market tensions: Even though it’s still a good time to sell on paper, it doesn’t feel that way. Following the onset of the pandemic, 2021 and early 2022 were such exceptional times to sell your house that as the market cools, it feels like a letdown.
Bobbie Schwartz, an Orchard Listing Agent with over 14 years of real estate experience, agrees. “When was the best time to sell your house? Well, probably January or February . It's not as good now, but it's still a really good time.”
That’s because following factors:
As the real estate market continues to normalize, buyers will likely have more negotiating power. However, it probably won’t tip into a buyer’s market, where supply exceeds demand, so sellers could still have the upper hand when selling in 2023. In winter of 2022, the inventory of existing home sales hovered just above three months, but that’s still three months below the six-month mark that the National Association of Realtors defines as a baseline supply.
There is no way to know for sure, but experts estimate that mortgage rates will stay around 5% from the middle to the end of 2024, with the earliest rate reduction coming in late 2024. Rates for a 30-year fixed rate mortgage are hovering around 6%. That’s higher than 2021 rates but still lower than the historical average of 7.77%. While these mortgage rates have priced some homebuyers out of the market, they’re still low enough to keep the current pool serious about home buying.
The first quarter of 2022 brought double-digit appreciation to home values. While the rate of appreciation is projected to slow in 2023, it is not forecasted to reverse; home values are still growing, and that means more money in sellers’ pockets. However, home prices in some of the most overvalued markets are expected to reverse before leveling out.
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But market conditions aren’t the only factors to consider when selling your house — there are other considerations, like what makes the most sense for you. Here are some additional elements to consider when contemplating if now is a good time to sell your home:
Even if the market conditions are perfect for sellers, that doesn’t mean they’re perfect for you. Here are some reasons to wait to sell your house:
Some expenses come with selling your home: closing costs, origination fees, and all of the costs of buying a new home. If you don’t have enough saved or wouldn’t make enough money on the sale of your home, it may be better to wait until you’re prepared to take on these costs.
Curious how much you’d make selling your home? Use Orchard’s Home Sale Calculator.
If you recently purchased or refinanced your home, you likely don’t have enough home equity to recoup the costs of selling it. If this is the case, it may be smarter to wait until you have enough equity to cover paying off your mortgage and closing costs — the “five-year rule” is generally considered the minimum for how long you should wait before selling your home after buying.
There’s no way to calculate exactly how much you can lose selling your house as-is, but consider that 80% of homebuyers prefer a move-in-ready home to a fixer-upper. A home that needs work can be a turn-off to buyers and drive down the asking price. Waiting to sell and fixing your home for the market could maximize your profits.
Profits from a home sale are subject to capital gains taxes. If you can’t afford to pay these taxes, it’s likely better to wait. You may even be able to avoid paying capital gains taxes on all or a portion of your home sale if you’re savvy.
Saying goodbye to a home is an emotional experience, which is probably why almost 40% of Americans cry during the process of selling their home, according to CNBC survey. Just because it makes sense on paper to sell your home, that doesn’t mean that it makes sense for you right now. Don’t be afraid to wait until you’re ready — if you don’t, you may end up with seller’s remorse.
The seller’s market makes it ideal to sell your home but complicated when buying your next one. Buyers who are selling their primary residence for a new one face an uphill battle: They need to sell their home first to buy a new one but may face a long waiting period before they’re able to close on their new home. Will they be able to get the closing dates to line up? What if one deal falls through? Where do they live in the meantime?
Orchard can help. Our Move First service helps you buy your new house, then sell your old one. We’ll even give you a guaranteed offer on your home, so you don't have to be a contingent buyer. Get started with a free home estimate.
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