Is it too LATE to SELL your HOUSE in 2022?
If you have been keeping an eye on the national real estate trends, you may have noticed a deceleration in the market…So what does that mean, transactions are taking a little longer and prices are adjusting to this more normal market.… This has left sellers with the feeling like they may have missed the boat on selling their home, but have they? Well let’s take a look!
Hi I’m Kim Devlin with Your Key to St Augustine….Welcome to my channel! If you are here it means you are likely interested in the area so thanks Like & subscribe for all things St. Augustine, local homes, and general real estate tips & knowledge!
SELLING YOUR HOUSE IN 2022
If you are a seller looking to maximize profit on your home, I want you to know exactly what is going on with the market today and how it is different from just 8 months ago.
First and most influential is the change to interest rates. In January the average rate was in the low 3% range, but now just 8 months later we have climbed to 7% and even higher. Rising rates directly impact the affordability for most buyers, and this increase means that monthly mortgage payments may be as much as $1,000 MORE than it would have been on the same property/sale price a year ago. This of course has caused some slow down in buyer activity and really ended the mad-rush of offers over-asking price.
This decrease in buyer activity has also led to a change in inventory, most clearly demonstrated by the average days-on-market for listings. With fewer buyers competing, sellers are not receiving multiple offers in a matter of days any more. Instead, homes are now on the market for weeks, even months, before the best qualified buyer comes into play. This longer time on market is also leading to more price reductions…and we are seeing more price reductions currently then we are new listings.
Days on market increased to 2.7 months from 1.4 a year ago
And homes are selling at 97% of the list price compared to a year ago when they were at 100%
Now 2.7 months is still very low inventory but with the price reductions and homes sitting on the market longer this is likely to increase month to month.
These trends tell us two things about the current market:
One – buyers are more limited on their budget
Two – buyers are being more deliberate and unrushed about their selections.
In turn, this means a couple of important things for sellers:
One – there may be a smaller pool of buyer candidates in your price range and
Two – your home may take a little longer to receive an offer.
Of course, real estate is a hyper-local market (as I always say “location is the most important thing!”). If you currently live in an area or neighborhood with very little turnover, your house might be the only one listed for sale and therefore the only practical option for some buyers. But, if you live in a high turnover area, there will likely be other sellers listed at the same time bringing you more competition.
A very important thing to remember is that last year’s market was unusual. The low interest rates and eagerness to change scenery following a year of COVID lockdowns really spurred a hot seller’s market. There was also a big increase in corporate investments – like Zillow – which drove up prices in some market areas that otherwise would have remained on a steadier pattern of listings and sales. The current adjustment we are seeing at first feels a little dramatic (in a negative way), but really what we are experiencing is a return to a more normal market.
As a seller, there are some key ideas to keep in mind as we go through this changing market, so let’s talk about some things you can do…
First – Be patient. If you compare your selling experience now with what your neighbors had last year, you will think there is something wrong with your property or your approach. It’s not that at all, but again since buyers are having to take more time to consider their best investment, listings are sitting on the market a bit longer. But keep in mind this is still not like the housing crisis in 2008 when we had too much inventory and plummeting values. We are still lacking enough housing as a whole for the home buyers out there.
Secondly – Be realistic and practical about your price. Pricing your home correctly from the start will make sure that the most qualified buyers are seeing it in their search feeds. This is especially important now because some buyers may be looking in a lower price range to compensate for higher rates, so instead of browsing $400k to $450k last year, this year those same buyers may be looking in the $350 to $400k price point.
You want to avoid overpricing your home: this will drag out your time on the market and in the end may net you less proceeds. Alternatively, pricing at a competitive value might attract several buyers and possibly land you multiple offers. I strongly recommend that my sellers aim for fair market value. And this brings us to point….
Third – Work with a REALTOR!
Most buyers and sellers only go through this process every few years – or decades – and the task can seem daunting. A seasoned real estate agent handles these details and ideas every day, and has dealt with the ebb & flow of market shifts from the inside. However, we did see a lot of Realtors get lazy with their marketing last year because homes sold easily but now is not the time for a that, make sure you use a Realtor that didn’t let the hot market deter them from something as simple as professional photography because those Realtors still spent the time and money to market your property even in a hot market.
Working with a realtor will ensure you get the appropriate guidance and help on:
- Determining the fair market value of your home, since your realtor will know the most appropriate comparable properties within a recent time frame
- Preparing your home to WOW buyers with suggestions on small repairs, staging, and professional photography or videography or both to use for marketing
- Advising when and how to make a price adjustment. If you list and soon realize you are not getting the traffic or interest you expected, don’t panic but don’t be stubborn about it either. As the market adjusts we need to be ready to adjust with it!
- Negotiating offers and concessions. Even if there is a lot of interest in your home, you might find that buyers might be more eager to make an offer with a little honey in the pot. Your realtor may suggest including a home warranty with sale, credit to the buyer’s closing costs, or buying down points for the buyer.
So yes, we are definitely seeing a change in real estate market right now, but that is not a cause for panic! As a seller, be aware of your fair market value, expect some time on the market, and be willing to work with buyers to make their offer a beneficial deal for both of you. And rely on your realtor to educate you on your local trends and guide you through a stress free and successful sale.
If you are thinking about selling your home now, you may want to watch this video on preparing and staging. You can use this video to critique your home as a buyer may view it and work on small items to really make a great impression.
I hope you found this helpful, I’m here if you have questions so don’t hesitate to reach out. See the calendar link below to book a zoom call.