Nationwide, Spring is usually a big time for people to put their homes up for sale. They want to be completely sold and moving by the time the kids are out of school and the landscaping is pretty in Spring so it always seems like the right time.
Unfortunately, this year that could be a bad move. Spring is here NOW when it comes to housing. If you’ve considered a move within the next few years (between now and 2020), you’ll likely net more from the sale NOW than you would waiting another year or two. This is true for a number of reasons including climbing interest rates as well as economic issues that are starting to wreak havoc on what has been a hot real estate market.
Since values plummeted between 2008 and 2012, we’ve seen a steady gain in value as well as demand year after year for another 4 year cycle. In my opinion, some areas appreciated a little too quickly. We are now seeing early signs of a possible slowing which can mean another adjustment in prices like we see after every four year real estate cycle.
It’s important to note that when we experience four years of reduced prices, it takes the additional 4 years of increasing prices to get back to the original value. So as an example, for the homeowners that were thinking of selling in 2008 but decided they may wait another year or two, they didn’t get back to that 2008 peak value until 2016! That was four years of price drops followed by 4 years of price increases which finally got back to that original number they could’ve achieved 8 years prior. Coupling that with the fact that factoring in inflation at just 3% per year eats up another 24% of that total number, it would’ve been a wiser move to make the transition long ago.
The fact is that it’s my job to ensure all of my clients are making the right moves for their family and their overall housing needs but we also need to ensure it coincides with decisions that are fiscally responsible and can maximize the investment you have with your house.
If you look around online right now, you’ll see hundreds of articles talking about how strong the real estate market is here right now, followed by hundreds of other articles saying it’s starting to slump with a big bubble getting ready to burst. As the saying goes, “never trust the media”. One thing is for sure, 50% of those articles are wrong.
I would tend to lean towards the probability of a slight slowing of the market and decreased values over the next few years. Nothing drastic but certainly a market correction. In turn, for anyone considering a possible move due to a life change, growing family, shrinking household size, etc. you’ll likely net top dollar early this year as opposed to waiting. Spring has sprung early when it comes to real estate and you’ll want to be ahead of a possible slowing if the 4 year cycles and all economic indicators ring true.
As we all know, real estate is a safe and sound investment that can always be profitable if you are in it for the long haul. Best of all, it provides safety and security for the family. As you are considering moves, timing the market helps too!
Monika Cabaj, Broker, Redco