If you’re like millions of Americans, your life has been profoundly impacted by the COVID-19 crisis. But perhaps you’re different from some of the pessimists who abound nowadays. Maybe you perceive positive possibilities in the current situation -- especially when it comes to real estate.
Suppose you’ve long planned to sell your home. If so, would now be a favorable time to put your place on the market? That depends on where you live and your level of equity, housing specialists say.
For the time being at least, there are plenty of indicators supporting the view that this is still a sellers’ market in many communities, says Jeff Tucker, an economist for Zillow, the national real estate company.
Tucker notes that the availability of near-record-low mortgage rates is helping fuel a brisk pace of home sales this summer. In many parts of the country, buyers are compelled to compete over fewer and fewer listings.
“The flow of new listings has recovered somewhat, but not fast enough to replace all the recent sales, so inventory continues to plumb new record lows,” Tucker says.
At the same time, for fundamental economic and demographic reasons, the shortage of available homes continues to push up prices, despite the reality that the overall economy remains in recession.
In one very positive sign for sellers, Lawrence Yun, the chief economist for the National Association of Realtors (realtor.org), reports that prices are still rising in a stunning 96% of U.S. metro areas.
“Home prices have held up well due to a combination of very strong demand for housing and a limited supply of homes for sale,” Yun says.
Yet, as Tucker points out, there are several factors that explain why many would-be sellers have been staying on the sidelines during the outbreak.
“There’s no single reason sellers have been slow to return. But some possibilities include reluctance to have strangers tour their home; concerns about difficulty getting their next home; and an assumption that they couldn’t sell for a high price now,” Tucker says.
Obviously, the decision on whether to move during the pandemic is a personal choice, especially for households susceptible to serious consequences from the virus. Yet those in lower-risk categories might consider this an opportune time to make a housing transition.
“Granted, it’s a lot less convenient selling a place when an infectious disease is spreading. But the real estate industry is doing a terrific job with modified showings and virtual tours. That means for most sellers, showings shouldn’t present much of a barrier,” says Mark Nash, a longtime broker and author of “1001 Tips for Buying and Selling a Home.”
But as Nash notes, any decision on the timing of a home sale depends in large measure on your financial position and the realities of your neighborhood market. He encourages would-be sellers to investigate these factors before finalizing any moving plans.
Here are a couple of pointers for sellers:
-- Get a grip on your home’s value.
As always, a minority of real estate agents might try to flatter you into hiring them by suggesting your property is worth more than it truly is, says Dorcas Helfant, a Coldwell Banker broker-owner and former president of the National Association of Realtors.
“You don’t want a fantasyland answer about your home’s value. You want your agent to be brutally honest -- to give you ‘tough love’ when it comes to the value and condition of your place,” she says.
One way to increase the odds of finding a realistic listing agent is to interview at least three prospects before making your selection. Ask each to do a “comparative market analysis” on your property, using recent data from like home sales in your area as a basis to set the appropriate list price.
“Think twice about hiring any agent who comes in with a proposed list price way above the other agents you’ve surveyed,” Helfant says.
-- Crunch statistics to assess your sales prospects.
Besides the location and condition of your home, another factor could strongly influence how much cash you’d receive if you were to sell: neighborhood competition.
“The inventory of rival homes available in your immediate area has a huge influence on local property values,” Nash says. By “inventory,” he means the supply of unsold properties now on the market.
For example, if there’s a three-month supply of unsold homes currently for sale in your market, you can expect to wait longer (and receive less in proceeds) than if there’s a one-month supply.
Nash recommends you ask your listing agent for a graph showing fluctuations in inventory levels for your community over the last 12 months. Also, ask for a similar chart showing what percentage of list price, on average, sellers have been receiving.
“If your home is priced right from the outset, it should fetch at least 95% to 100% of your list price -- or even more than the list price. What’s more, this gap should be narrowing rather than widening,” Nash says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)