Most people probably think of the decision to sell their home as a highly personal one. And of course, it is. But if you can choose the timing, it’s wise to look at your personal circumstances and beyond. Here are 5 reasons why early 2017 could be the right time to sell in the Portland market.
- Your home is no longer a good fit with your needs and wants
- You have significant equity in your home
- Portland continues to be a lopsided seller’s market
- Portland is expected to remain near the front of the national pack in home price gains next year and mortgage interest rates may rise
- There are real advantages to selling in winter rather than waiting for spring
1. Your home is no longer a good fit with your needs and wants
It may be time to move if you’re facing a growing or shrinking family, a promotion with a bigger paycheck, a new job with a long commute, retirement or aging, divorce and so on. As your life changes, what you require in a home changes too.
Apart from the question of size – whether you need something larger or smaller – you may be looking for an upgrade in the quality of your home. For example, energy efficiency and low monthly utility bills, little or no need for renovation and improvements, an updated kitchen, age-in-place features, more privacy or lots of storage space.
In fact, these features were among the top 10 unmet housing needs in a national household survey by the Demand Institute last year. If your home doesn’t have these features, you may decide to move to get them. And if your home does have these features, it’s likely to be especially attractive to buyers if you have other reasons for selling.
2. You have significant equity in your current home
You may be lucky enough to have lots of savings and assets apart from the ownership you’ve built up by paying down your mortgage. But for most people, home equity accounts for the lion’s share of personal wealth. So they need proceeds from the sale of their home to qualify for a loan to buy a new one.
The good news? Equity is back. According to the Case-Shiller indices, the leading measures of residential real estate prices in the US, the market has fully recovered from the recession, with home equity doubling in the last five years.
In fact, Portland ranks #6 among 88 metropolitan areas for its share of equity-rich homeowners. Over 33 percent have a loan-balance-to-home-value ratio of 50 percent or less. The national average for equity-rich homeowners is 23.4 percent. Of course, you don’t have to be equity-rich to sell your home. Many Portlanders have the financial means to make a move, not just those who meet the definition of that term.
3. Portland continues to be a lopsided seller’s market
The Portland Metro market has favored sellers since March of 2012, but the trend has intensified over time. The threshold for a balanced market is 6 months of inventory, but we haven’t broken two months since February 2015. This year inventory peaked at 2 months in September and October, and then slipped to 1.8 months in November according to the Regional Multiple Listing Service. Meanwhile, the current figure nationally is 5.2 months.
In a seller’s market, where demand outpaces supply, homeowners have the best chance to sell quickly, at or above list price, and under other favorable terms and conditions.
4. Portland is expected to remain near the front of the national pack in home price gains next year and mortgage interest rates may rise
Realtor.com predicts that Western metropolitan areas will see much higher gains in prices and sales than the country as a whole next year. Portland is forecast to be among the top 10 markets, with price growth of 6.6 percent and sales growth of 5 percent.
Though interest rates remain at historic lows, they spiked after the election last month. And last week the Federal Reserve raised its key interest rate for the first time in almost a decade – by a quarter of a percentage point. Mortgage rates will likely rise in the coming year.
In an environment of rising prices and interest rates, it’s wise to buy a home sooner rather than later, especially if you’re trading up. You’ll get more for your money and a lower monthly payment than if you wait.
5. There are real advantages to selling in winter rather than waiting for spring.
The idea that winter is a bad time to list a home is a myth according to US home sales data for the past four years through August 2016.
In Portland, winter takes 2nd place after spring for the percentage of homes sold above list price – 13.8 versus 15.2 or a percentage point difference of just 1.4. There is a bigger seasonal difference where the percent of homes that go under contract within 30 days is concerned. At 33.9 percent, winter takes 3rd place after spring (38.6 percent) and summer (35 percent).
But other factors offset the advantages of listing in spring. As explained in Item 4, sellers who will buy a replacement home stand to get more for their money and a lower monthly payment by acting sooner rather than later. Furthermore, both sellers and buyers face less competition in winter, sales close faster or spend less time in escrow because the market is not as busy as in the spring, and buyers who are looking tend to be more serious.
Of course, given Portland’s very low inventory, what holds many local homeowners back is concern that they may not be able to find the right replacement home and uncertainty about whether to buy or sell first. But there are lots of ways to hedge your bets. Click here or on the image for a free tool that will help you develop a game plan.