Thursday, October 1, 2009

Are Home Sales Up in Your Market?

Home sales and prices increased in the latest reports although markets still vary widely.  So how do you decide if now is the time to sell your home?

First the data:

Pending home sales rose 6.4% in August, it's highest level since March 2008 based on date from NAR (read the full article here..)  and the market has been rising for seven month in a row (according to MarketWatch)

One factor in this rise seems to be the $8,000 tax credit for new buyers, due to expire in November 30th.  This approaching deadline could be driving buyers to act.  There has been a heavy push by the real estate lobby to extend the tax credit, but with no bill yet settled buyers may have been rushing to get the credit while it lasts.

The other fundamental factor is low cost, due to lower overall home prices and historically low mortgage rates.   While rates are fairly consistent nationwide, prices have continued to vary based on local market conditions, housing supply and economic activity.  To check on your local market trends download the full report here...

Opinions about what will happen to prices are all over the board, but opinions don't sell a home.  Knowing your market does.  Here are 5 concrete steps you can take to use data and research to help you sell your home.
  1. Read up about your local market.  Case-Shiller and Zillow  both put out reports about housing market trends.  You can assume buyers will have been looking at the data,  know what they say and have a response as to why your home fits with these trends or stands out.  But don't be caught by surprise.
  2. Determine if your neighborhood is in line with metro and state trends.  Often news stories and data cover wide areas, but real estate is local, know how your neighborhood varies and be able to explain it's features.
  3. Take the time to ask buyer about their future plans. If you find someone happy to live in your neighborhood for 10 years because of good schools that will put short term price changes in a very different context
  4. Estimate what rental income for your house would be and how that compares to the cost of buying it as an investment.  Not every area is open to investment income, but for some buyers even the thought that they are not trapped by a mortgage and can recoup a substantial portion by renting the property will lower their fears and help your home sale.
  5. Remember a house is a home to be lived in.  Despite everything, people still want to live in the home of their dreams and most will find a way to pay for that.  Your number one job as a home seller is to help buyers see what their lives would feel like in your house.  This is easier than it sounds, simply ask them what they want and hope for then take the time to step back and listen.  Don't tell them about your kids growing up, or your additions or remodeling, instead listen to their dreams and ideas for what your house could be.  Dreams always trump data.