Real estate experts say when it comes to this year’s housing market, some potential sellers are in a much stronger position than others, depending in large measure on where their property is located.
“I think it’s a tale of two economies now,” says Glenn Kelman, the chief executive officer of Redfin, the Seattle-based real estate company that tracks markets all over the country.
Given the COVID-19 pandemic, Kelman says the locational preferences of homebuyers are now shifting dramatically -- a trend he expects to endure for months and perhaps years ahead. Broader acceptance of “virtualization,” which involves telecommuting from home offices, favors For Sale properties in popular suburban or small city settings.
“I’m really worried about the big cities,” says Kelman, who says online search traffic shows that relatively few buyers now aspire to live in densely populated urban areas where coronavirus cases have been numerous. Transaction data from major cities like New York and San Francisco are proving notable examples. Also hurting big city markets is their high housing prices.
The good news for wannabe sellers in favored suburban communities is that pent-up demand there is still outstripping the supply of available homes, which should prove a strong assist for owners who wish to sell later in 2020 or early next year.
Jan Brito, a Washington, D.C.-area real estate broker, says suburban sellers with homes that have large yards and are located close to solid schools are currently faring well.
Are you a homeowner considering a sale before the pandemic clears? If so, these few pointers could prove helpful:
-- Check out the supply-demand ratio for your neighborhood.
Before setting your price and timing your sale, you need to know if values are rising, falling or holding steady in your community, says Eric Tyson, a personal finance specialist and co-author of “House Selling for Dummies.”
“You need to determine if you’re living in one of those micro markets that’s holding up nicely,” Tyson says. He says news reports on real estate often understate wide neighborhood-to-neighborhood variations.
“I’ve always objected to that one-size-fits-all view of real estate. It’s very important to know what’s going on in your particular community. But don’t rely solely on anecdotal reports. Numbers can speak louder than words,” he says.
To assess the overall trend for your neighborhood, you need to look at closed sales going back at least five years.
“Track median prices for all the homes sold in your area. But don’t bother tracking average sale prices, because they can be very affected by the mix of homes sold at any given time,” Tyson says.
By noting changes in values over multiple years, you can evaluate the relative strength of your market and how aggressive you can be on pricing.
“When you’re making big decisions on when to sell and how much to ask, there’s no substitute for good trend data,” Tyson says.
-- Ask local real estate agents about recent closed sales in your area.
You may believe your neighborhood is an exceptional micro market that’s stayed strong despite economic turmoil in the country. But before putting a price on your property, Tyson recommends you solicit the views of three experienced real estate agents who’ve long worked your area.
Prior to settling on a listing agent among the three candidates, he says you should ask all three to justify their opinions on your home’s current value.
“Ask them to go over recent comparable sales in your community, telling you why your place is worth more or less than the ones that have sold,” he says.
If two of the three agents say your community is going through a lackluster period for sales, yet the third is enthusiastic about an upturn, Tyson says you should be skeptical about the optimist’s views.
“Most people are inclined to hire the agent who has the most positive position on valuations in their market. But that’s not always a good idea,” he says.
-- Price your place fairly rather than boldly.
Real estate specialists say that within every metropolitan area there are now micro markets where values are staying strong. But they caution against overconfidence at a time when many buyers are anticipating an erosion in property values.
Tyson says wishful thinking about their neighborhood can cause owners to overprice. That, in turn, can mean a home sits unsold for a lengthy period, resulting in a “stale property” that will ultimately go at a deeper discount than would otherwise have been necessary had it been priced realistically from the outset.
“Affordability remains a huge issue especially for young buyers still in the household formation stage. Even if you live in an attractive enclave, don’t fall into the trap of appearing greedy, which is a big mistake,” he says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)