As of this morning (2/24/12), there are 16,589 properties actively listed for sale in the Arizona Regional Multiple Listing Service, well below our peak inventory levels in the 50,000+ range at the height of the foreclosure crisis. Moreover, there are currently more homes under contract (19,962) across the Valley than currently available to purchase. 7486 properties closed escrow in the last month. At this rate, our market has just over 2 months of inventory. The supply of quality homes is anemic to the point that multiple offers and bidding wars are erupting across the greater Phoenix area on new listings. By any reasonable measure, we have stumbled into a strong seller’s market early in 2012.
So it’s time to throw your house on the market, right? As in all matters, it depends.
The case for selling
You have been trapped in a home you couldn’t sell for the past several years. Eager to downsize, upsize, relocate, etc, you’ve put your plans on hold while the market languished. Not convinced that this break in the clouds isn’t just a temporary mirage versus a sustainable recovery, you aren’t going to look a gift horse in the mouth. Buyers are buying, and climbing over each other to do so. With the summer coming up, you are going to cash out what’s left of your equity so that you can finally get on with the next phase of your life before the winter/spring visitors leave, gas prices shoot through the roof and the market returns to its regularly scheduled slump.
The Case for Waiting
Yes, the market is changing. The Real Estate signs that once lined your street are disappearing. The last house on the block sold in a day for 10k over list price. It reminds you of the market conditions from 2005 that temporarily shot your value through the stratosphere. Now your house is worth about what you paid for it in 2002. You are tempted to throw your place on the market now that there are buyers for it, but you won’t have much left over for a down payment on another place. Further, you know this is the beginning of the recovery. Why sell at the low point when values should continue to climb for the foreseeable future? You’d like a new home that more closely reflects today’s needs, but aren’t willing to dump the current one at a price that might look low with a year’s hindsight.
The Case for Compromise
Can you cover your current mortgage by renting out your house? If so, and you have the financial means to qualify for another loan without selling, you might consider that route. For those who are optimistic that the current market is a sign of better things to come, this tactic covers two bases: 1) Secures the new property at today’s prices before appreciation takes further hold, and 2) Allows for holding on to the former property for another year or two of market gains before selling for a better price.
Which Road is Right for Me?
There is no one-size fits all equation for the buying or selling of homes. In addition to the financial variables at play, there are personal and emotional considerations that don’t fit neatly into a spreadsheet. The best advice I can offer is to take a close look at your chief objectives before deciding whether this is a “good” or a “bad” time to sell your home. Real Estate sales do not take place in a vacuum. The sale of a home must be considered in tandem with the subsequent purchase and vice versa.
It is a good time for sellers, in general, but that doesn’t mean that there isn’t an even better time coming, or that it’s the “right” time for you.
Don’t hesitate to contact us for a complete review of your unique circumstances to determine if now is the ideal time to take the Real Estate plunge. We pledge objective analysis and honest opinion. Nothing more, nothing less.