The decision to sell a house isn’t something most sellers take lightly. People sell for many different reasons with many different goals in mind. According to the Zillow Group Consumer Housing Trends Report 2018, half of the sellers (50%) say maximizing profit is their most important goal in selling, while 38% of sellers prioritize selling within their target time frame. And 12% of sellers say making sure their home has a good next owner is their most important priority.
What kind of home is the average homeowner selling? In the U.S., the typical home sold by a seller is a 3-bedroom, 3-bathroom home with 2,000 square feet and a median price of $210,000.
Should I sell my house right now?
There were more than 1.5 million U.S. homes listed for sale on Zillow in April 2019, which may sound like a lot, but it’s actually the lowest number in any April since at least 2013 (when our data begins). And in many markets, inventory has been falling consistently for years — meaning would-be buyers have been starved for choice for a long while. This could be reason enough to consider putting your house on the market now instead of waiting. Here are some other reasons the time might be right.
You need the equity
Homes are an investment, and if you need the equity you’ve gained for retirement, a new home purchase, or another type of investment, you might want to sell to make those funds available.
Equity depends on how long you’ve owned your home and what market conditions were like when you bought. For example, if you bought between 2012 and 2015 when home prices in the U.S. were still recovering after the recession, you might have a lot of equity to put toward another purchase.
You can make a strong profit
After seven years of virtually uninterrupted growth, home values actually fell slightly in April 2019 from March 2019 — an indicator that the big gains of the past few years may be coming to an end and a signal to those who’ve been waiting to sell that now may be a good time to do so, especially if you have a lot of equity.
Here’s an example. Let’s say you bought your home in 2012 for $200,000. The value today is $300,000, and your outstanding mortgage balance is $140,000. That means you currently have equity of $160,000, which might be enough for you to consider moving.
Note that if you do sell, you won’t pocket the full $160,000. You’ll have to pay for all the costs related to selling, like closing costs, agent commissions and pre-listing home improvements. You may also want to factor in the interest you paid over the years for a more accurate figure.
Your home is in good condition
If your home is cared for with updated systems (like HVAC, plumbing, and roof) and features buyers are looking for, you may turn a nice profit. Here are a few examples of the amenities that yield the highest returns in the U.S. when they’re included in a listing description:
- For entry-level homes, “solar panel” nets sellers 40% more over entry-level homes that don’t have solar panels.
- For midrange homes, “shed/garage studio” helps sellers net a 24% premium.
- For high-end homes, “Sub-Zero fridge” nets sellers a 38% premium.
You need a lifestyle change
New family members, kids leaving the nest, and retirement are some of the life changes that might lead you to sell and move into a larger (or smaller) home, into a different area or near a particular school district.
You can afford an upgrade
If you have your eye on a larger, nicer, or better-located home, you may need to sell your current home to afford it — both to be able to put down a significant down payment and to ensure your debt-to-income ratio qualifies for a new loan.
You don’t want to risk a recession
While most homeowners have seen good appreciation over the last few years, our one-year forecast shows appreciation slowing somewhat. If you think the housing market in your area (or the economy as a whole) is showing signs of a slowdown, you may want to sell while home values are still high. Keep in mind that if you’re buying and selling in a slow market, depreciation might not matter as much. While you’ll make a bit less money on the sale, the new home you’re buying may have dropped as well, and the equity you do have in your existing home can give you better buying power.
For the time being, 2019 has seen strong buyer demand, though homes are staying on the market longer than they did last year.
Source: Zillow