With a recession looming, it is to be nervous about whether its a good time to put your house up for sale. But 2019 was a record year for home sales in Houston, Texas.
You may be wondering 'should I sell my house' before the economic downturn hits? Check out these top reasons it's a great time to repair and sell your home.
Demand Is Up
When it's a seller's market, houses are in greater demand than during a buyer's market. This means home sellers can demand top dollar on properties.
The Houston Association of Realtors points to a healthy local job market as one of the top reasons home ownership is up in the metro area. As the national and global economies begin to slow, the job market will gradually begin to suffer making it harder for buyers to qualify for mortgages.
Take advantage of the healthy job market by placing your home up for sale before the impact happens. Experts can't say when exactly a recession will occur, but it's unlikely to be an instantaneous hit that bars you from selling your property.
The Fed has consistently cut interest rates in 2020 in an effort to boost the national economy. While this doesn't include mortgage interest rates, it does affect how cheaply buyers can borrow money.
For example, credit card interest rates are expected to decrease which gives buyers access to more capital. Mortgage interest rates are still relatively low which also helps home buyers.
When mortgage interest rates are low, it decreases monthly payments making home ownership more affordable.
Sales Price Matters
Whether or not your home sells quickly depends on its sales price. In Houston, homes in the median and luxury ranges sold faster than lower-income housing in 2019.
But this isn't the norm. Homes at higher price points usually have less buyer interest and a longer sales cycle.
It's much easier to sell your home if it is close to the median sales price for your housing market. Whether or not low priced or high priced homes sell depends on the intensity of demand.
For example, housing markets like San Francisco might see more buyer interest at high price points because demand is scarce. In cities where inventory is high, buyers have more options at affordable price points.
The housing market is seeing a wave of new qualified buyers. This new wave is mostly made up of first-time home buyers who are able to get special programs that help them afford a home.
One example is an FHA loan which only requires buyers to put down 3.5 percent on a mortgage loan instead of the standard 20 percent. These programs make home ownership attainable for buyers of all income levels.
You Have Equity
If you've owned your home for more than a decade, you've seen ups and downs in the housing market that seemed like they would never end. But demand increases value.
In seller's markets, housing prices rise with demand. Sellers see an increase in equity that is driven by new buyers flooding the local housing market.
Take advantage of your home equity increase by selling it for a profit. No one can predict what next year will bring so it's a great idea to sell and use your profits to purchase your next home, boost your savings or invest.
Just remember to sell your home before moving. A booming housing market is never a guarantee of a fast sale.
Things like lack of neighborhood amenities or being in a poor school district can affect your chances of getting qualified buyers. Make sure you wait until after closing before locking yourself into a new mortgage or lease to avoid the chance of paying two housing payments.
Spring and Summer are, by far, the best times to sell your home. With children out of school, families are waiting until these months to make major changes in their housing.
Prepare your house for a warm-weather sale by performing general maintenance and repairs. The better condition your home is in when the spring rolls around, the better your chances of finding an interested buyer.
Preparing The Home For Sale
Keep in mind that some repairs are mandatory before a mortgage will issue a loan on your property. If you have major foundation or permit issues, for example, expect to have these addressed before going under contract.
You don't want to delay the possibility of selling your home due to negligence. Consider making upgrades that boost the overall value and appearance of your home.
Repairing or upgrading a roof can be a huge benefit for new homeowners. Upgrades like tile and slate are more expensive to install but they give your home a higher-end look.
In markets like Houston where higher-priced homes are trending, this is a major investment to consider. You want your home to compete with other properties in your area.
Should I Sell My House?
Whether your downsizing or upgrading, selling your home can help bring a fresh start to your lifestyle. When the question 'should I sell my house' comes to mind, think of all the financial benefits profits will bring after the sale.
Selling your home is a great option to help pay down debt or cover other big family expenses. For homeowners who purchased their home after the recession when prices were low, today's market will bring surprisingly high amounts of equity.
Remember to plan your repairs ahead as they will affect your ability to profit on the sale. If current repairs are beyond what you can afford to pay out of pocket, this might be a time to delay the sale of your home and try for better profits later.
For more information on caring for your home, check our blog for updates.