To sell or not to sell, that is the question.
Homeowners have a critical choice this summer and the remainder of 2023, as they’re faced with a series of unprecedented market and economic conditions.
From non-ideal mortgage rates to low supply and the possibility of a looming recession, there is no perfect roadmap for where the housing market may go next. But one thing is for sure: Sacramento homeowners are sitting on record equity after nearly a decade of hot home price growth, and they’re wise to think about listing it for sale to cash in.
So, here are 5 considerations when thinking about selling this summer:
1. Equity
Like we mentioned, homeowners are sitting on a mountain of equity. Especially in Sacramento, we’re seeing record value in our homes above what we owe. Even if you bought just a few years ago, you’re probably sitting pretty.
However, prices have dropped in 2023 and there is the possibility that they’ll drop more. The market is already trending in that direction and that could especially be true if we face greater economic troubles.
So, how can you cash in?
Sell! And if it’s your personal residence, you have some amazing tax benefits to selling and pocketing a bundle, too!
2. Seasonal Uptick
Most years, there’s an uptick in busy buyers, sales volume, and motivated sellers around the spring, summer, and early fall. And even though this market is a unicorn of sorts, we’re seeing that seasonal uptick now.
So, the overall trend may be that prices are dropping and the market has cooled, but you may have a small window to sell your home this summer or during 2023 and maximize profits.
3. Low Inventory
When people talk about this housing market, they often mention mortgage rates first. However, there’s probably another factor that’s dominating our housing conditions even more: low inventory.
In fact, the number of available homes for sale is just about at all-time lows, and that shortage is even more profound among modest home prices in Sacramento.
So, conditions are perfect for homeowners to list their home for sale and cash in. But wait too long and that may change in a big way. Once homeowners realize that values are dropping, equity is dwindling, AND the economy is turning for the worse, there will be a huge wave of people who want to (and need to) sell their homes.
That means more competition – and probably lower prices – for you.
4. Strong Demand
While supply may be paltry, supply is still strong – particularly in the Sacramento region. The city continues to grow by leaps and bounds, more and more people are moving to the capital of California, and even Bay Area investors and buyers abound.
Based on the typical household income in Sacramento, there’s even more of a pressing need in the modest price range of under $500k or so.
Add to that trend the huge number of potential buyers who put their plans on hold because of Covid and/or need to buy again because of post-Covid lifestyle (like returning to the office), and there’s still a very strong demand among buyers, despite lukewarm mortgage rates.
5. The Economy
Homeowners may be in a great position, but our overall economy may bet teetering on a cliff. Economists predict a recession in 2023 or 2024, which could range anywhere from mild and short-term to catastrophic and lasting years.
Looking at job losses, a massive wave of maxed out credit cards, banking failures and more should be enough to scare homeowners into selling now out of security – cashing in their sizable profits before it’s too late.
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So, if you bought a home a few years ago and have been quietly pondering if it’s a good time to sell or not, please take a hard look at these factors before making your decision.
And the easiest way to get some sound advice is just to contact us for a detailed market analysis to determine what your home is worth and pencil out what a home sale (and subsequent purchase) would look like!
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