How to Know if It's a Good Time for YOU to Sell

Buying and selling in the same market cycle, in the same region, can be tricky and overwhelming. I have this conversation almost daily with my clients, and I've found that the majority of people who are considering selling their home share a common concern: that they don't want to deal with the pressure of buying in a hot seller's market.

First of all, this is completely understandable. It's reasonable -- smart even! -- to wonder what the advantage is to selling in an ultra-competitive market, when it will turn you into one of the many buyers competing for your next home.

Our team has devoted a three-part series to tackle this conversation. What you're currently reading is Part One, and our goal is to lift the fog that is caused by all of the pressure and panic in the messaging you're hearing about the market right now. With that fog lifted, and with that pressure alleviated, it's possible you'll be able to make a sound decision about the right next step for you.

Before we discuss whether or not it's a good time for you to sell, let's establish the circumstances that are making this sellers market so hot:
Low interest rates have increased buyer demand. Interest rates continue to be (and will likely be for the next few years) historically low. Many first-time homebuyers are taking advantage of this opportunity, as well as individuals who want more and better house for the same money.

Appreciation potential is much greater on homes that are valued higher. Our market saw about 10% average appreciation between 2019 and 2020. If you own a home that was worth $150,000 in early 2019, this means the value appreciated $15,000 by early 2020. However, if you owned a home valued at $250,000, its value appreciated $25,000 in one year. That's a powerful thing, especially as low interest rates mean lower monthly payments.

My husband and I recognized this last summer. While we could have stayed in our Apple Valley home, we knew that we could leverage a lower interest rate to purchase a home with a higher value for the same money. Our monthly payment is almost identical, but the home we purchased was valued $40,000 higher than our home in AV, and this asset will perform better over time. Not to mention the lifestyle benefits of being in a home that has more style, better finishes, and in town-- we're very pleased.

Low inventory creates competition and stronger offers. We've talked about this a lot, but it's a powerful opportunity for sellers. Because demand is so high, and the number of homes available are so low, you have the opportunity to hand pick the contract with terms that work best for you. This leads to higher profits and faster sales.

But of course, you're savvy, and you already know all of this. And just because the market is hot, it doesn't necessarily mean that it's the right time for everyone to sell. If you're wanting to determine whether it's the right time for you to sell, here are some things to consider. This is important because there are good reasons and there are bad reasons to sell. Let's start with the good!

1. You need to ask yourself if you enjoy the home you're in. If you're in the wrong location for your lifestyle, you should consider changing your location. Another great example of this is whether or not you need a home office (as many of us found ourselves without suitable spaces to work during the pandemic). Or, maybe you need more or less space. Whatever the reason, if the home you're in doesn't work, it doesn't work, and it's absolutely worth looking at a change.
2. You want to upgrade your living situation. If you're inspired by my story, I want you to know this is absolutely possible for you. Especially if you purchased 3+ years ago, you should look at getting more and better house for the same monthly payment.
3. You want to leverage the appreciation that the market is experiencing. This might feel a little risky, but can be a good decision based on your situation. I recommend discussing this thoroughly with your agent.

Now, for the bad reason...

Do not let anyone tell you that you should sell because you'll miss out on the strong seller's market. Making decisions out of panic will perpetuate more panic, and this kind of pressure will only serve to weaken your position. I am finding too many people in my community who are only considering selling because they feel like the housing bubble is about to burst at any moment. This just isn't the case, and we'll dive into why in part two!

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-Cassie Johnson, Key Realty - John Yoder Team