Traditionally,
most homes have sold during the spring months. In the current volatile
housing market, the time of year is not the most reliable predictor of
the best time to sell. Homes certainly show better in spring
than they do on a dark and dreary winter day. Lately, however, weather
patterns are hard to predict.
The weather has some effect on
home sales. It can slow things down if incessant rain keeps sellers
from being able to prepare their homes for sale. However, a bigger
influence on the housing market is the overall economic situation and
its impact on buyers' psyche.
Normally, the home-sale market
ramps up in March or April and stays busy until the beginning of July
when the market tends to slow down for the summer. The 2011 home sales
went counter to this. The market was active at the beginning of the
year, but stalled in April. If you waited until spring to sell last
year, you would have missed the best selling opportunity of the first
half of 2011.
The early slowdown was partially due to the expiration of the
homebuyer stimulus package. The homebuyer tax credit program
accelerated home purchases creating a mini bubble in 2010 that was
followed by a significant slowdown in home sales.
Negative
economic news played a big part in the sluggish home sales during most
of last year. The stock market was unpredictable, and the earthquake in
Japan had repercussions for many industries. Plus, Greece was on the
brink of bankruptcy, and the future of the European Union was in doubt.
Bad economic news and massive uncertainty lowers consumer
confidence. Buyers need to have jobs, but they also need to feel
confident in their future to take on a major purchase like a house.
HOUSE
HUNTING TIP: The best time to sell is when consumer confidence is on
the upswing; interest rates are low; unemployment is decreasing; the
economic news is mild; and there are more buyers in your local market
niche than there are sellers. A high-demand, low-inventory market gives
sellers an edge.
The Conference Board Consumer Confidence Index
fell in March 2012 to 70.2 (1985=100), down from 71.6 in February,
when it was up sharply.
Lynn Franco, director of The Conference
Board Consumer Research Center, attributed the improvement in consumer
confidence in February to less pessimism about current business and
employment conditions and more optimism about the short-term outlook
for the economy and job prospects despite a rise in gas prices. Franco
said the moderate
decline seen in March was "due solely to a less
favorable short-term outlook."
Interest rates are currently at
historic lows and are expected to stay low for the rest of the year.
Even with low rates, buyers have had difficulty qualifying due to rigid
mortgage approval underwriting.
Capital Economics, an analytics
firm, expects the housing crisis to end this year partially due to
lenders loosening credit. According to Capital Economics, one indicator
of loosening is that banks are now lending 82 percent of loan-to-value
(LTV), compared with a low of 74 percent LTV reached in mid-2010. This
means qualified buyers need less cash to buy, which should lead to
more sales this year, although higher home prices are not expected.
These
positive indicators combined with a drop in homes for sale at the end
of 2011 and a decrease in unemployment may provide an opportunity for
sellers in spring 2012, provided their homes are priced right for the
market. A major surprise on the economic front could change the
picture.
THE CLOSING: Regardless of the economic indicators, the best time to sell is when the time is right for you.
http://www.inman.com/buyers-sellers/columnists/dianhymer/5-signs-its-a-good-time-sell
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