Two years ago, a couple in their mid-30s -- a museum administrator and a sales manager -- began weighing the pros and cons of buying a home of their own. But only recently did they get serious about their search for a townhouse in a leafy suburb near their workplaces. No longer are they waiting for home prices to slip in the desirable neighborhood of their choice.
“What triggered them to leave the sidelines was their landlord’s notice of a major rent increase. They’re also afraid that a year from now, home prices will be even higher. In addition, they’re having a big wedding in December, and want to settle down,” says Stacy Berman, the real estate agent assisting the pair.
Berman says that despite relatively high mortgage rates, many would-be buyers are unwilling to delay longer. At this point in the cycle, they fear that postponing will only mean paying more for a property, given the severe shortage of available homes.
Danielle Hale, the chief economist for Realtor.com, the online listing service, says the number of available homes has dropped 25% from a year ago.
“Sellers are exercising caution in their selling decisions, likely due to being locked into mortgage rates that are significantly lower than the current rate,” Hale says.
Nearly one-quarter of homeowners now have a mortgage rate below 3%, which is roughly half the prevailing rate.
Jasmine Harris, a Redfin real estate agent in Atlanta, says, “The only people selling right now are the ones who need to.” They include those getting divorced or moving abroad. They also include retirees who wish to move out of state to be closer to their grown children and grandchildren.
Are you a homeowner now contemplating a sale without delay? If so, these few pointers could prove helpful:
-- Downscale your expectations for major price jumps.
Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home,” says that even in some exceptionally strong markets, demand is not as great as it was during the pandemic when multiple offers were the norm rather than the exception.
It’s not that would-be purchasers are no longer crafting competitive offers. Many are still making above-list-price bids. Some are even including “escalator clauses” to top the highest rival purchaser.
But sellers who are arrogant about their pricing and terms of sale are more likely to be financially hurt in the end.
“This isn’t the right time to be a greedy seller -- if it ever was,” Davis says.
He says a listing agent who’s skilled in calculating the right price for a property is a valuable ally for sellers who want to hit the target when their home first goes up for sale.
“Remember that a house that sits unsold for long eventually gets stigmatized,” Davis says.
-- Look for a listing agent in your immediate area.
When it comes time to sell a home, many owners think it’s wise to hire a trusted family member as their listing agent. But Davis cautions against choosing someone from your inner circle.
Even if your family member has a proven track record in real estate, choosing that individual as your agent could be a mistake.
“Your relatives probably won’t tell you if your place is a dump that needs to be decluttered or that it’s worth a lot less than you think,” Davis says.
He recommends you interview three agents who work in your area to determine the right one to sell your house. Ask each to give you a candid evaluation of both the condition and current worth of your place. Also question all three on how they came up with their pricing recommendations.
“You want to see the actual comparable sales used to support their recommendations. In a changing market, it’s especially important that these sales be very recent --preferably for houses sold within the last month,” Davis says.
-- Consider a listing agent’s track record on pricing.
Are you planning to sell a home in an area where property values are now flat or slipping slightly? There are still such communities, especially in areas where unemployment is increasing, perhaps due to the closure of a local factory or military base. In that case, it’s unlikely you’ll receive your full asking price at the closing table. But if your property was marked correctly from the outset, you should still come quite close.
How can you judge whether the agents you’re interviewing have a good track record on pricing? One way is to review a few key numbers on their past listings, such as “list-to-sale” statistics. Then compare the original asking price versus the sum ultimately received by the sellers.
If the agent is routinely making realistic recommendations, there should be little difference between the original list price and the final sale price.
“Don’t listen to any agent trying to flatter you into a ‘feel-good price’ that’s much higher than other pros are suggesting -- with the unspoken expectation of seeking a price cut later. That could lead to a very subpar sale,” Davis says.
(To contact Ellen James Martin, email her at email@example.com.)