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Putting your home on the market can be nerve-wracking even during a great economy. As the real estate market continues to be uneven in terms of prices and available inventory, it may seem counterintuitive to list your home. But the real-estate Magic 8-ball says, "All signs point to yes" when it comes to listing your home. Here’s why now might actually be the best time to sell your house.
Mortgage interest rates are dropping
While the nail-biting initial months of 2022 slowed the housing market with the Fed’s seemingly meteoric interest rate increases, these seem to be calming down as the year comes to a close. This does not mean rates will stay low, but for now, there seems to be more stability.
Combine these lower interest rates with buyer incentives and competitive realtor commission fees, and you’ll have plenty of eyes on your property.
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Inventory is down
House inventory remains at record low levels. Why?
The COVID-19 pandemic exposed broken links in the supply chain and saddled the construction industry with crippling labor shortages, but the problem didn’t start in 2020. Available housing stocks just couldn’t keep pace with the demand of a rising population.
Another complication is the accelerated pace of real estate investing that occurred when interest rates bottomed out. Investors snatched up everything from apartment buildings to vacant land. These investors made up 13% of all real estate transactions in 2021.
The result is low inventory for regular folks looking to move. So if your home is in an in-demand market, chances are good your timing is just right. Shortages drive up prices and can help you get what you need when you sell.
Buyer demand is still high
Even as home prices soar and bidding wars ensue, buyers are still looking to move. The recent drop in mortgage interest rates and other buyer incentives are luring house shoppers who put their plans on pause over the summer. Real estate agents are also offering more competitive rates that benefit both buyers and sellers.
People are relocating for work
As remote work fades into the distance, many potential buyers are re-evaluating their needs as they head back to the office. Some are staying home part-time, while others are planning to move to a new city or home that better suits the life they discovered during the pandemic.
Some people can rent out their homes and purchase in their new location, but there are a significant number of people who need the cash from their home sale to purchase their next property. This benefits both buyers (who need more homes to choose from) and sellers (who want to get the best price possible).
Downsizing makes sense
For some, this limited inventory coincides with their desire to downsize. Some families loved the room to roam during COVID-19 but found it impractical now that most of the nation is out of quarantine.
Large houses also cost more to heat, cool, furnish, and take care of. For families on a limited budget who just don’t need that much space, downsizing to a smaller house just makes sense.
Moving for a new layout
Another piece of the pandemic housing puzzle is how people use their homes. Locked down, with remote work and school, some found their homes no longer fit the way they wanted to live. Data from the International Casual Furnishings Association found that 90% of people in the U.S. believe outdoor spaces are more important than ever, with 78% of those people making upgrades to their space.
Those who did not remodel due to supply and labor shortages are now looking for a ready-made address with outdoor amenities.
It’s time to sell
Turns out, the best time to sell is when it’s time for you to sell. Sometimes you can’t wait for the market analysis to catch up with your needs.
If this is the case, it’s important to do your homework about getting the most for your house. The cost of selling a home varies from state to state, with an average of around 10% of the sale price. This can cut into your bottom line, so make sure to set your home up for success from the start.
This means you can:
Invest in staging
Make updates that give you the best ROI
Price it competitively
Use an experienced realtor
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A Fannie May consumer survey in October found that even with interest rates rising, 51% of respondents believed it was still a good time to sell a house. Heading into 2023, most experts agree. With the potential for a slight increase in interest rates in 2023, buyers are looking to jump at the current downturn in the rates right now. The verdict is in: get your home to market.