Selling Your Home in Today’s Changing Market
If you’re thinking about selling your house, you might have noticed that housing has slowed down. You might have noticed a lot of open houses. You might have noticed that homes are staying longer on the market. And you might have noticed that there are fewer offers on the properties. So what is happening in the market can and if you’re thinking about selling a house, is this the right time to sell? And how do I sell my house quickly?
According to the National Association of Realtors, of which I’m a member, last year they mentioned that $6.1 million homes nationwide would be sold in 2021. In 2022, the projected sales are right around $5.4 million. So there’s a significant drop in the number of homes for sale. So, does that mean the prices are going to go down? Does that mean that housing prices have peaked? So does that mean that you should sell right now and wait and chase the market, whether it goes up or down? Do you want to sell your house at the maximum price so you can make the most profit by selling it now or at the right time? So let’s look at some numbers to make a decision and to give you some ideas on whether this is the right time to sell or not. The other thing to keep in mind is that despite the high home prices, they’ve gone up and up and up since 2011. They’re up. So buyers are still buying. So there’s buyer demand. Interest rates have gone up from 2.5% almost a year ago to over 5% today. Inflation is almost at 8%. At least gas prices were $6 per gallon, at least. In Orange County, they’re back to $4.5 to $5%.
But despite these numbers, buyers are still buying, which means for the sellers, there is a demand. Also, homes are selling nationwide on average in 14 days, which is very fast compared to when they were selling in eight days. So, yes, they have almost doubled the number of days it takes to sell a house. But selling a house in 14 days is very fast. And that means one thing and only one thing. When a home sells in 14 days, on average, on an average, it means we are still in a seller’s market. So if you’re a seller, that’s the biggest advantage that you have. So here is a quote from Lawrence Yoon, chief economist for the National Association of Realtors: “Home prices that are right are selling very quickly, but homes priced too high are deterring buyers.”
To sell a house quickly or at the right price, you must have high buyer demand. And we do have high demand, as I mentioned earlier. Despite the circumstances and numbers, which are all high. High prices, high interest rates, high inflation. So let’s look at some numbers coming from the National Association of Realtors and KCM. So let’s look at this chart. According to this chart, there are fewer multiple offers compared to last year or compared to the spring of this year. In May of 2022, an average home got 4.2 offers. If you come to July of 2022, the average was 2.8 offers. So there’s a drop. But that’s still a very good number, because you are getting 2.8 offers versus no offers at all, or just one offer in 30, 40, or 50 days. So that’s still a very good number, even though it’s less than what they were in May or in 2021. In 2021, I remember getting homes on my listings, and when I wrote offers, there were 2030 offers, which is ridiculous. So that has slowed down. The second number to look at is that there are fewer homes selling above the asking price. In May of 2022, 55% of all the homes listed sold over the asking price. And if you compare that to July 2022, 39% sold over the asking price. Yes, that is also a drop in the home selling price. But that’s a very good number because homes are selling at or above list price. In a buyers market, homes sell below the list price. And if you go back to 2008 and look at these numbers right now, I mentioned earlier that homes were selling in 14 days on average. There used to be eight days in an average home across the country. Did you know what the days on the market were in the recession times in 2007? Eight, nine? Well, an average home takes about four to six months to sell. Sometimes they do not sell. They came back on the market and sold at a reduced price, and they took another two or three months. So that was a buyers market where prices kept coming down and down and down, and homes were taking four to eight months to sell. So, when there are multiple offers on a home, it sells within 14 days. Buyers are selling; they are coming to open houses. This is still a seller’s market. So if you’re thinking about selling a home, yes, it’s a great time to sell. Personally, I think we have peaked. It may go up another 1 or 2% per year. But if you compare your house to five years ago, six years ago, seven years ago, you’ve gained 30%, 40%, 50%. So selling your home in today’s market will not result in a loss. You will be laughing all the way to the bank all the way.