Should I Sell?

BY JAMES HOLDEN

It’s the early days of 2023, and the question of selling or staying put continues to haunt buyers; it is a time when housing inventories are depressed, inflation is out of control, mortgage rates are sky-high, and a recession is looming in the future.

But, as consumers see the value of their homes increase beyond their wildest expectations, many are tempted to list their primary residences for sale; they view it as the perfect opportunity to generate a windfall. Of similar thought, others believe it is an ideal time to upgrade to a more impressive home offering more lavish amenities.

Unfortunately, the challenge homeowners face after a quick sale, and a handsome profit, is to find an affordable and suitable replacement. In reality, without a firm commitment to relocate, risk takers will need to search for a rental or move to another state; and in the worse case, it would be to place personal items and furniture in storage.

During the last decade, families and speculators have used real estate market gyrations to upgrade or spin homes for profit. Low-interest rates, stimulus packages, the ability to work from home, plus a glut of properties coming to market at the speed of a conveyer belt; have made for perfect fiscal scenarios.

While the party seems to be over, it isn’t a complete bust; home buying has slowed, having to do with fewer homes being listed rather than inventories sitting idle. Demand remains robust, with available properties spending only a few days with a for sale sign in front of them.

There are plenty of qualified buyers on the sidelines with guaranteed funding, so what is the problem?

Primarily, it is a combination of fear and interest rates for the lower and midlevel markets; the less savvy buyers re- main hesitant, while seasoned investors are quick to come in with cash, gut a home, and turn it into an income-producing asset. The result is a trail of remorse felt by the timid and inexperienced.

Conversely, as net worth increases, so does the ability to sit and wait for a deal. Not long ago, homes sold at top-tier prices of $5-$30 million. However, with a softening market, there appears to be a wait-and-see attitude. Motivated buyers are searching for homes supplying equity after the sale, a distressed sale, or locate a seller unwilling to ride out the slow-down and accept a less-thanoptimal offer.

By all indicators and conversations with leading real estate professionals, there’s an emerging trend for homes priced between $650,000-$1.5 million. This soft spot is a comfort zone for those ready and able to purchase. The loosely guarded secret is to enlist a broker to locate what you are looking for because seldom do the best deals make it to the public square.

Understanding the market’s psyche and looking forward rather than viewing the past or present is far more productive in predicting what lies ahead for housing. The adage, a rising tide floats all ships, could be what’s on the horizon. Here’s why: there is a supply crisis and a significant lack of affordable rentals. Lower-end properties are hard to find, although government incentives and programs should show some easing.

As populations find new housing opportunities, their standard of living improves, resulting in competition and giving families an incentive to purchase a home.

Basic rules of supply and demand will likely be tied to the future easing of mortgage rates, which will be related to politics. As we approach a hotly contested election season, both parties will push to reward consumers for swaying opinions of the country’s financial condition.

Back to the question, “Should I sell?” It’s a seller’s market and could be an ideal time to move, provided you are patient and have your eye on a new home.

Proper planning can be achieved by working with a qualified broker or agent. To orchestrate selling a home and securing another can be intricate and requires careful planning and timing to complete the seamless sales.

Expertise in negotiating an option to purchase a home upon selling your property requires experience. A strategy used in this type of negotiation is to create an incentive for a seller, a willingness to make concessions, or pay a fee for the privilege of entering into this type of agreement—it’s only one of the many options available. H