This question or thought is more for Mark, but if anyone else has any input, it would be greatly appreciated. My wife and I have a plan of moving in a year or two, however, with as hot as the market is right now, I am struggling with waiting or pushing the time line up and selling now. My ultimate fear is the market goes down in a year or two and we miss out on some money. I guess my question is, do you foresee the market staying like this or is the year to get it done??
Sell now or wait?
- Thread starter moneyshot8434
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Im in the same position especially with being on a 5 year ARM with my loan. With the rate that i got with it and how good the market is, in my situation im waiting until next summer/fall to maximize profit after talking to a few friends that are realtors as well.
Have a price in your head, put your house up for sale to see what comes. If someone comes in at your price, sell. If not, then no harm done. Although, I have never sold a home, I am not sure if there would be real estate fees associated with putting your house up for sale and then taking if off the market.
I always look at it as a consistent trade off as long as you are moving within the market. As long as you owe less than it's worth, low prices on the sale will equate to low prices on the new purchase and vice versa.
Good question and almost impossible to answer. Look at it this way. How many real estate agents that you know predicted the last bubble bursting before it actually happened? Very few, if any. Point is that we do not know what will be happening in the world a year from now. All we know if right now.
Right now, rates are low. At some point, these will go up and when they do your buyer pool gets smaller. For every 1% a rate goes up, a buyer loses 10% of buying power. That is a big deal.
Also, in certain price ranges right now, the market is limited on great options. This means you get close to asking price and sell quickly.
All of this depends however on exactly where your home is and the price range.
The key is if you sold today for what you believe you can sell for, are you happy with that number? If you are and it serves your timeframe for what you are wanting to accomplish, go ahead and sell.
If you are not in a hurry and can wait a year, go ahead and do that, but don't be shocked if the market is the same or not as hot a year from now. That is certainly possible too.
Of course its difficult to impossible to accurately predict the future. Having said that we are seeing all of the signs that the market is getting overheated while the number of sales isn't up all that much. The best predictions that I have seen will be for interest rates to really start rising around October this year. If that happens then this will be a short lived bounce or "echo boom" from the top in 2007. Interest rates have generally been falling since 1980 and that makes this a 35 yr bull market for bonds and thats unlikely to last.
With these low rates I would say your best bet is to find the place you want to live for awhile and lock it in now. Selling just because the market is strong doesn't make a lot of sense if you have to buy right back into the same market. If you sell and move somewhere else or rent for awhile it could be an advantage. I would just want to try and lock in my housing costs with a fixed rate mortgage while the rates are so good.
With these low rates I would say your best bet is to find the place you want to live for awhile and lock it in now. Selling just because the market is strong doesn't make a lot of sense if you have to buy right back into the same market. If you sell and move somewhere else or rent for awhile it could be an advantage. I would just want to try and lock in my housing costs with a fixed rate mortgage while the rates are so good.
If you are going to stay a while in the new place, I would do it now. Borrowing money is damn near free, it cannot go any lower. Don't try to time the housing market, lock yourself into a 15 year loan (not a 30) at less than 3%.