Let’s talk about the market for existing homes in Wisconsin, and whether this is a good time to sell your home. For the record, I believe that the market conditions in Wisconsin right now are as
Apr 30 2018 57142 1
Let’s talk about the market for existing homes in Wisconsin, and whether this is a good time to sell your home. For the record, I believe that the market conditions in Wisconsin right now are as good as they’ll be for a long time. They’ll get worse before they get better. That said, does your personal situation coincide with the current phenomena to create a selling scenario? That’s what you need to know. If it does, then SELL NOW. If not, you might just be better off waiting.
Let’s look at some fresh numbers. The Wisconsin Realtors Association last week released its March Home Sales Report. Three indicators just jump off the page. Here’s the abstract:
“The lack of homes for sale in March caused existing home sales to drop and prices to rise, despite a very strong state economy, according to the most recent analysis of the Wisconsin existing home market by the Wisconsin REALTORS®Association (WRA). With year-over-year inventories down 17.1 percent, sales slipped 2.3 percent in March 2018 compared to March 2017, while prices rose 7 percent to $174,900 over that same period. On a year-to-date basis, sales were up 2.1 percent, and median prices rose 6.3 percent relative to the first three months of 2017.”
Simple supply and demand, right? Inventory is down, demand is up, prices are up. A nice seller’s market, for sure. But…is this the optimal time to put your home on the market? I wouldn’t know until we’ve talked. Only then can a good realtor guide your decision process.
(And listen. You really, really need to trust good realtors. You can’t just assume that your home is worth seven percent more today than it was a year ago because of this report. A good realtor can break your home’s value down to the street level and pull in a multitude of factors to give you a precise value for your home. There’s a plethora of data out there, much of it privy only to realtors. We are trained to understand and parse this data to your advantage.)
Related factors? Let’s look at interest rates. Barring a major unexpected shift in the economy, the Fed is expected to continue its series of minor interest rate hikes. This typically coincides with higher mortgage rates. As mortgage rates rise, the cost of financing a home increases, and the universe of potential qualified buyers for your home decreases. This alone should give you pause if you’re thinking of selling your home by yourself. Only in a perfect economy, with perfect information, are realtors unnecessary (as long as you have a good attorney.)
Meanwhile, the market for new homes continues to percolate. Vacant land turns into new homes as fast as our builders and developers can make it happen. But as we like to say, God isn’t creating new land, so we have to work with what he’s made. The dwindling number of prime lots is selling fast and at a premium. It’s not unusual to pay upwards of $70,000 for a nice lot in the Fox Cities today. Further, home builders are paying 5 to 10 percent more today for raw materials than a year ago. With the diminutive existing home market fueling demand for new construction, you can see why new construction prices are rising fast. Keep that in mind if you plan to sell your current home and build the home of your dreams. This is a good time to talk to your realtor about the builders they’ve built trusting relationships with over the years.
Want to sell and move to a warmer state? Great. There are still some great areas to relocate to at reasonable prices. But they’re selling fast. And remember that even if you use the cash from the sale of your existing home to purchase your dream home, the buyer of your current home will likely pay a higher interest rate than you did.
All of this is just to say that the market for selling your home, here and now, is great. But are you, your family and your finances ready for the transition? Consider what happens if you sell versus if you don’t.
How much is your home worth? Will its value continue to appreciate? What’s your equity position? What can you get with that money here or elsewhere? How will this change in the next 60 days, 6 months, or year? How would you feel about leaving money on the table today by accepting a lower net value deal next year? What are your opportunity costs? What are your holding expenses?
Why do you want to sell? Are you financing a kid’s college tuition? Do you need to move to the school district across town to optimize your kid’s education or training? Do you want to invest in other timely opportunities? Do you simply want to get out of an empty nest? How will you feel when your neighbor sells their inferior house next month for more than you believe your house is worth? Can you walk away from the dream house you have your eyes now on because you’re waiting for the exact right time to put your home on the market?
A good realtor can help you sort through the noise and isolate the important factors. Ultimately, you decide. But we can help you make the best, most informed decision. We can bring you accurate assessments of your home’s value and potential. We can help you sort through your personal factors within the context of the current and expected home selling climate. But only you can decide when it’s time to pull the trigger.
Caryswood is here to help. We come from contribution. We offer that personal touch that larger groups might have forgotten. It’s you and us for the long haul. Let’s work together and find the best strategy for your home and your family.