Why The Best Time to Downsize Is in An ‘Up’ Market
Let’s face it, we are in unprecedented times right now. The global pandemic is all that is in the news and will be for the foreseeable future. It has affected every single industry and person in the world, mostly for the worse, but some industries are thriving, such as medical device manufacturers, grocers, personal protection equipment manufacturers, toilet paper manufacturers, and hand sanitizer manufacturers, to name a few.
Before the world seemed to go sideways, the residential real estate market was on fire. We have been seeing the best market in history with historically low interest rates, inventory, unemployment, and historically high home prices, and the economy. Things were good, really good.
But, now, that has all changed. Unemployment is the highest in decades; businesses are closed (some for good); people are scared; interest rates, while still low are more volatile than at any other time in history recording their biggest jump in the shortest amount of time a couple of weeks ago of 2.5% in 36-hours! This is supposed to be an extremely busy spring market.
While real estate activity has absolutely waned, it is far from nonexistent. In fact, according to MIBOR, on April 9, 2020 (that’s right, only one day!), there were 147 new listings that hit the market, 100 sellers accepted an offer and went pending, 56 homes sold and closed, and homes sold in an average of only 7 days for 100% of asking price! So, it isn’t all bad news!
We still have an extremely low inventory of homes right now. In fact, our inventory level is at an all-time low of only 1.4 months. Compare that with a balanced supply of homes of 6-months and you can see just how tight our inventory really is.
If you are considering selling your house, especially if it will be a ‘downsize’ move, this may very well be the perfect time for you to catch the pinnacle of the market and cash out of your house. You see, in a sellers’ market like this one, otherwise known as an ‘up market’, people who are downsizing are perfectly positioned to take advantage of the market working in their favor. Let me explain.
Let’s say, you could sell your house today for $300,000 and we know this is near to at the top of the market. Furthermore, let’s say that you are downsizing to a smaller house that is more in line with your current needs that is $200,000. While you are at the top of the market for both transactions, the more expensive transaction is the most important from a monetary perspective in an up market. It will net you the most money in the end. Buyers are clamoring for more homes to hit the market and you can help to satisfy that appetite and cash in.
In order to maximize your sales price, I strongly recommend having a pre-listing inspection completed by a reputable inspection company and that you make any needed repairs and then advertise that to buyers. Secondly, provide a 1-year home warranty to buyers at closing for additional peace of mind. Have a licensed Stager walk through your house and give you suggestions on any updates or upgrades you should make that will provide you with the biggest bang for your buck. Ask your agent for help with both of these.
Start looking for your next home before you put your current house on the market as that may take a bit of time due to the low inventory levels. That way you don’t have to make an interim move. If you can buy your next home before you put your current house on the market, that would be the best scenario (and safest given the current health issues right now).
While there are a lot of negatives right now, there are certainly some positives. Take advantage of them and consult with your real estate agent who should be able to guide, lead and protect you through the complex and difficult real estate process. We would be happy to discuss your specific situation with you, if you wish in a no-obligation, confidential consultation.
Things will get better and we will be here and ready to help when you are! Stay healthy!
Steve Rupp
The Zulu Group, P.C.
Keller Williams Indy Metro North Realty
www.Welcome2Indy.com
Steve@Welcome2Indy.com
317-573-1880-Office
Let’s face it, we are in unprecedented times right now. The global pandemic is all that is in the news and will be for the foreseeable future. It has affected every single industry and person in the world, mostly for the worse, but some industries are thriving, such as medical device manufacturers, grocers, personal protection equipment manufacturers, toilet paper manufacturers, and hand sanitizer manufacturers, to name a few.
Before the world seemed to go sideways, the residential real estate market was on fire. We have been seeing the best market in history with historically low interest rates, inventory, unemployment, and historically high home prices, and the economy. Things were good, really good.
But, now, that has all changed. Unemployment is the highest in decades; businesses are closed (some for good); people are scared; interest rates, while still low are more volatile than at any other time in history recording their biggest jump in the shortest amount of time a couple of weeks ago of 2.5% in 36-hours! This is supposed to be an extremely busy spring market.
While real estate activity has absolutely waned, it is far from nonexistent. In fact, according to MIBOR, on April 9, 2020 (that’s right, only one day!), there were 147 new listings that hit the market, 100 sellers accepted an offer and went pending, 56 homes sold and closed, and homes sold in an average of only 7 days for 100% of asking price! So, it isn’t all bad news!
We still have an extremely low inventory of homes right now. In fact, our inventory level is at an all-time low of only 1.4 months. Compare that with a balanced supply of homes of 6-months and you can see just how tight our inventory really is.
If you are considering selling your house, especially if it will be a ‘downsize’ move, this may very well be the perfect time for you to catch the pinnacle of the market and cash out of your house. You see, in a sellers’ market like this one, otherwise known as an ‘up market’, people who are downsizing are perfectly positioned to take advantage of the market working in their favor. Let me explain.
Let’s say, you could sell your house today for $300,000 and we know this is near to at the top of the market. Furthermore, let’s say that you are downsizing to a smaller house that is more in line with your current needs that is $200,000. While you are at the top of the market for both transactions, the more expensive transaction is the most important from a monetary perspective in an up market. It will net you the most money in the end. Buyers are clamoring for more homes to hit the market and you can help to satisfy that appetite and cash in.
In order to maximize your sales price, I strongly recommend having a pre-listing inspection completed by a reputable inspection company and that you make any needed repairs and then advertise that to buyers. Secondly, provide a 1-year home warranty to buyers at closing for additional peace of mind. Have a licensed Stager walk through your house and give you suggestions on any updates or upgrades you should make that will provide you with the biggest bang for your buck. Ask your agent for help with both of these.
Start looking for your next home before you put your current house on the market as that may take a bit of time due to the low inventory levels. That way you don’t have to make an interim move. If you can buy your next home before you put your current house on the market, that would be the best scenario (and safest given the current health issues right now).
While there are a lot of negatives right now, there are certainly some positives. Take advantage of them and consult with your real estate agent who should be able to guide, lead and protect you through the complex and difficult real estate process. We would be happy to discuss your specific situation with you, if you wish in a no-obligation, confidential consultation.
Things will get better and we will be here and ready to help when you are! Stay healthy!
Steve Rupp
The Zulu Group, P.C.
Keller Williams Indy Metro North Realty
www.Welcome2Indy.com
Steve@Welcome2Indy.com
317-573-1880-Office
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