In a market that is in contraction, we’re seeing sales activity in some segments that, at face value, doesn’t make any sense at all. How can it be that in a sluggish real estate market (remember, it got a grade of C+) there are houses selling in the first few days on the market with many receiving multiple offers? The answer from my analysis of Fort Collins area statistics is that the listing inventory is down by as much as ten percent from the previous year, yet the number of closed sales for the same period has actually increased by as much as three percent. With higher demand and less inventory, showing pressure and competition among the houses on the market has been greater.
So it is a good time to sell, right? Maybe. The characteristics of homes that are selling quickly are homes in excellent condition, in desirable locations that are priced aggressively. If your home can fit all of those criteria, chances are it will sell relatively quickly. On the other hand, if you are looking for a specific cash-out figure from the sale of your home - then you’ll probably be less willing to price aggressively. Homes that have ho-hum prices, get ho-hum showings and are sitting for long periods of time before they sell.
As you consider putting your home on the market there are numerous elements and variables to evaluate to determine whether now is the right time to sell. First, what is your goal? Do you really need a bigger home? Do you really need to down-size? With rental vacancy rates down, is it possible to use your current home as a rental and buy something that is a better fit? Ask yourself and your REALTOR this question: "If I could buy my home right now for what I paid for it, would that be a good deal?" For some that would be a great deal and is an indication of potential equity. For others, it may not be possible to sell the home for what was paid a couple of years ago.
One of the greatest services of our industry is the Competitive Market Analysis, or CMA. Most REALTORS will be more than happy to prepare one of these documents to assist you in determining if now is a good time to sell. With a CMA you’ll have a snapshot of the current market and where your house fits into the competition. It also gives you a rough estimate of how many days, weeks, or months it will take to sell. The market analysis will show you the homes that have sold and those that failed to sell. That way you ensure getting a good cross section of data that will provide an intersection of price ranges. Be forewarned, however, that the true determiner of market value is what a buyer is willing to pay you for your home.
Motive is the catalyst for change. Without motivation, nothing happens. The gap between your desired situation and your current situation is where motivation lives. Take a close look at what you’re willing to do to get to your desired situation. Figure out if the reward for taking action outweighs the cost of keeping the status quo. In many instances our true motivation for change has nothing to do with how much money we make or spend but more to do with how the change will make us feel. If moving to a ranch in-stead of remaining in a 2-story will improve your quality of life because you don’t have to plan your day around going up or down the stairs - that may be a far greater motivator than the net proceeds of the sale of your 2-story home. By the same token, if moving to a home with more bedrooms and a bigger yard will mean that your family is more comfortable and harmonious, that may be well worth the extra dollars spent each month on the new home. Your REALTOR is trained first and foremost to be a real estate market specialist. However, our role as a service professional includes auxiliary roles as investment counselors, economists, therapists, and confidants.
Is now the time to sell? Ultimately, that is the most personal of choices that can’t be determined by what the "market’ is doing. The economic indicators for our area are showing continued yet modest signs of improvement which is preferable to sharp highs and catastrophic lows. My hope is that this information has provided some guidance to help determine what is right for your situation.
