Sell home now or 2015?

sun2007January 22, 2014

We need to decide to sell our home now or next year. Current tenant is moving out and it's kicked us in the butt to make a decision.

We live in the Bay Area and bought at the peak. House prices are finally recovering in our area and the supply is so low that the good ones are snatched up with multiple offers quickly. We may break even on this house if we're lucky (negative after realtor fees, etc)

The market IS going up in our area so hubby wants to wait and lease for another year. Rent would not cover mortgage, insurances and taxes but he believes the payoff selling next year covers that loss.

But with interest rates potentially rising, more supply next year and other factors we cannot plan for, is the time now to list? If we were to list now, we know our house will stand out and make a big splash and there are tons of buyers just waiting and watching.

Our concern is not that the house won't sell (it absolutely will), it's deciding if waiting and renting is thr smart choice in a currently rising market.

Any advice? Anyone experience something similar?

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jewelisfabulous

The old adage seems to fit your situation well, "A bird in the hand is worth two in the bush."

Since you know the market conditions now, it makes sense to sell now versus gambling that next year's selling conditions will be better. I understand your husband's point of view, but too much depends on everything going exactly how he hopes -- how often does that happen?

I would spent the next month painting, cleaning, refurbishing, etc., then list it at the beginning of March at a price a little more aggressive than the comps that sold late 2013.

    Bookmark   January 22, 2014 at 2:34PM
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gyr_falcon

Don't underestimate the ability of low supply in raising prices. In spring of 2013, in our area, the supply was very low. Prices jumped at a shocking rate, and homes sometimes had 15-20 offers within a day or two. People were putting in bids on more than 50 homes, all over asking, without being able to purchase any of them.

Come summer though, the inventory improved. And by fall, there were many houses available. Prices are still high, but they have dropped from the frantic bidding wars' stage and the houses now can sit on the market for a month or longer.

With the added costs of waiting a year, you may not come out ahead by waiting. But you know your area better than I do; my crystal ball works better locally. ;)

    Bookmark   January 22, 2014 at 5:11PM
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frugalwallflower

Agree with above posters.

Sell now! You know market conditions. Could you do minimum prepping, maybe clean really well and paint just a bit, and sell quickly with multiple offers? Then do it!

Best wishes!

    Bookmark   January 22, 2014 at 5:58PM
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artemis78

I would sell now. We're also in the Bay Area, and I think it will be a while before we see anything like the crazy price increases of the last year, except in some very specific trendy neighborhoods. In our area, we're already starting to see prices level off--sellers are asking more, which is probably part of it, but overall it's not frenzied buying and overbidding the way it has been in the last year. Everyone who's been waiting for the market to improve to sell is gearing up to list this summer or next, so supply is going to pick up markedly, at least where we live. I imagine the same thinking is happening in other parts of the Bay too, though. If you can get the house ready to list this spring, I'd try for the early part of the peak season--I know lots of people looking who are frustrated with the slim winter pickings, and I bet you'd get a lot of interest from buyers like that who are coming off of losing out on multiple offers last year. This time next year, if listings really do pick up a lot this summer, it might not be the same game.

    Bookmark   January 23, 2014 at 1:52PM
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chispa

In 2007 many thought they should wait to sell because prices always went up. We know how that turned out. So much could happen in the economy, although the government seems to do whatever they can to prop up real estate.

Is this a rental property? Do you want to get out of the landlord business? If values are up and you have a mortgage, have you refinanced at lower rates? I would think that rentals are in demand due to the high cost of purchasing. If you need/want to sell then I would do it now and not wait for a market which might or might not be better next year.

    Bookmark   January 23, 2014 at 9:50PM
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sun2007

Artemis,
Could I ask where in the bay you live?

    Bookmark   January 30, 2014 at 1:00AM
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artemis78

We're in the inner East Bay. Not as nuts as the Peninsula and SF proper, but still at or over peak prices in many popular Oakland and Berkeley neighborhoods. I keep waiting for the other shoe to drop, but while prices do seem to be stabilizing at the new highs in our area, they definitely aren't falling. I suspect that as goes the tech boom, so goes the Bay Area housing market, at least for neighborhoods close to BART or Caltrain.

    Bookmark   January 30, 2014 at 1:52AM
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luckymom23

In regard to the market, I am in agreement with the responses you are getting. A couple of other considerations for you...
We made the decision to sell a rental at a specific time due to needed upgrades and maintenance on the horizon. At the time the home was in a 'hot area' and we knew it would sell quickly at a great price. If we had chosen to wait for the market to rise even more, we knew there would be some big ticket items that would offset any additional gains in equity. Give thought to your home's current condition and whether you will need to do more to make it market ready in a year than today. Also, if you were to get a problem tenant would the headaches created be worth it? They could damage the home or not pay their rent, either would cut into your bottom line and if you got involved in anything messy or difficult it could hamper your ability to sell the home when you are ready. We have had mostly good experiences with our tenants, but with each new lease there is always some risk.
Best of luck to you.

    Bookmark   February 2, 2014 at 1:11PM
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