Real estate cycles
Buying your home was probably the best investment you ever made. That's because over the long term, real estate has proven to be a sound investment while at the same time offering you and your family shelter and a feeling of pride of ownership.
However, real estate is subject to the law of supply and demand which creates cycles in the market. A shortage of homes generally means prices rise. This cycle is commonly known as a "seller's market." Alternately, a surplus of homes can result in a slowdown in home sales or even a reduction in prices and is often referred to as a "buyers’ market."
So, which market is best?
Obviously, you will want to sell your home a quickly as possible and for the highest possible price. In a "seller's market," you often see many buyers competing for the same house resulting in top prices or sometimes even over the original list price. Spring tends to be an attractive time for real estate sales as gardens start to look nice again and people come out of hibernation. Buyers with school-aged children like to purchase in the spring so they can move in over the summer. However, if you are planning to purchase another home after the sale, chances are you will be competing in the same seller's market faced with higher prices.
In a buyer's market you may find you have to wait longer to sell your home for a fair price. Change of season and the weather can affect buyer demand. For example, fewer buyers may be out looking at homes during the cold and snowy winter months, but as a seller you will be competing with fewer homes on the market. The upside to selling your home in a buyer's market is you'll have more selection and pricing options when you go looking for your new property.
Although the current market cycle should influence your decision to sell, remember there are trade-offs to selling in either a buyer's or seller's market. Some people are concerned that if they trade up to a larger home in a buyer's market they will lose some of their home's equity in the sale. But, while you may sell your home at a "discount," it's likely you will purchase your larger home at an even greater discount. The advantage: you then own a larger asset with even greater potential for appreciation.
One of the most important services I provide to my clients is market analysis on their property. If you are considering a move in the upcoming season, feel free to give me a call. I can give you up-to-date information on what economic and other factors are impacting current market conditions and suggestions to achieve your most successful sale.