What resolutions should home sellers make this year? If they want to get the most out of their investment, starting with these four resolutions can help.
As 2019 gets going, it’s worth looking back at another year in which home sellers did well, but often at the expense of home buyers.
First, in much of the country, home prices rose precipitously in 2018. Home sellers saw home price appreciation greater According to the Zillow Home Value Index, median prices rose 7.7 percent in 2018 (Zillow expects median prices to rise another 6.4 percent in 2019), and the median home value is $222.800.
While not every market rose that much in value (notably Chicago and Las Vegas), the majority of metropolitan areas in the U.S. has seen significant price appreciation over the past few years.
What generally happened in 2018 was a repeat of what happened in 2017: Millions of homeowners decided to stay in their homes rather than trading up to a larger home or downsizing into a home that’s more affordable.
The question is, why are so many Americans staying put? The answer has to be a combination of rising mortgage rates, lack of inventory, longer working life, and perhaps even fear of the unknown.
Let’s break that down a bit. Ten years ago, at the start of the Great Recession, mortgage interest rates began falling further. In fact, millions of Americans began refinancing their mortgages, opting for super-low interest rates with shorter loan terms. (We took advantage as well, and opted for a 3 percent 15-year mortgage, and made the same monthly payment, and will have the loan paid off very soon.)
When we look around, it’s clear that millions of Americans are living in homes with mortgages that are less expensive than getting a new loan today would be, and their homes are maybe nicer than anything they could buy for less (so much for trading down), but in any case it’s expensive to move.
And, why move? If you’re in a home that’s relatively cheap to live in, and still meets your needs, and it would be more expensive to move elsewhere, and you’re still working, you’ve eliminated most of the reasons that people sell.
And, if you add in the fact that your now more expensive home might appreciate another 6.4 percent in 2019 (again, a Zillow Home Value Index projection), you might think you’re leaving money on the table if you list your home for sale today.
What are some reasons that people are moving? To be near their children and grandchildren. To take a new job. To retire. And, yes, to trade up to a larger, nicer home they can now afford.
So, if you are thinking about selling in 2019, expect it to go faster than you imagine. While the high-end housing market has been slowing in places like New York and San Francisco (after all, how many people can afford a $10+ million home), and even in super-hot markets like Denver and Dallas, there are plenty of buyers and still not enough homes for sale.
Would-be sellers should resolve to:
- Find where you want to live before you sell your home. This is contrary to the advice we usually give, but if your market is still hot, at least knowing where you’d go (or rent for an interim move) will reduce stress.
- Clean up your junk before inviting listing brokers to see your home. First impressions are important. Be sure to watch some videos on staging your home for sale so you understand what buyers are expecting to see – and then make your home look that way. (Even if you’re selling in “as is” condition, it pays off to stage your home.)
- Be sure the broker or agent you hire matches your temperament. Hiring an agent is like a short-term marriage. Be sure you find someone who really “gets” you and listens to you.
- Understand your home selling timeline. If you want to sell quickly, set a very competitive price. Don’t worry about underpricing your home – while less common than in 2018, buyers will jump at the chance to buy a competitively priced home and you may wind up with more cash in your pocket at the end of the day, with a faster timeline than if you priced your home higher.