Your home: Waiting until spring to sell your home will probably cost you

Oh the spring market! The two words together have a great “ring” don’t they? I do love the spring market. Mainly because I love the weather. Not because it is the best market that we will see all year. Honestly, as a seller, the market of today offers better odds.

I have had the privilege of meeting with many potential sellers this year already and most of them ask the same question: “When is the best time to list our home?” And my response is almost always the same: “In a perfect world, it would have been yesterday. May I explain?”

Here is the explanation. The spring market is lovely. Everything is in full bloom, the temperatures are pleasant, and hopefully no one is shoveling snow! Additionally, real estate signs start popping up all over the place. Starting slowly at first, and then building to a more frenzied pace come April and May. And yes, the market seems to be more “active” at that time. The challenge is that activity and a “SOLD” sign in the yard are not the same thing at all.

Today most areas of NEJC have between two and three months of inventory available for sale. That is still a seller’s market and is teetering on a strong seller’s market. As the days pass by and we move into the spring, the number of homes for sale will increase. As will the number of active buyers. However, because we know that history tends to repeat itself and that this year seems to be positioned similarly to last year, please reference the graph below. This graph illustrates the inventory trends for February 2013 through June 2013.

2013_Inventory

As you can see, inventory steadily increases from February through June. Conversely, please notice that the number of pending listings peaks around May and then falls in June. Interesting huh? If you look more closely, the inventory from February to March increased by 207 homes. At the same time, the pending sales only increased by 183 homes. February of last year is when the contracts received were no longer able to keep up with new homes coming on the market. Therefore, the inventory began to increase. More inventory equals more competition.

Now let’s look at March to April: 101 new listings and 84 new contracts received. Inventory continues to build.

Let’s jump ahead to the period from May to June: 514 new listings added to the market (WOW!) and….yikes! The number of pending listings actually drops from 876 in May to 725 in June. The supply at this point is greatly outpacing the demand. When this happens, values tend to stay static (slowdown in appreciation) or in some cases values may settle a bit. In addition, more choices for a buyer means they can be more picky. Objections that were once overlooked when the inventory was tight are now under a magnifying glass when inventory is plentiful.

The last piece of the puzzle is that rates are on the move. Yes they have settled a little this week. But if we look at the trend, even just since right before Thanksgiving 2013, rates are up almost half a point. I call it the last piece because if a seller in today’s market is going to finance their next purchase, the interest rate will have a significant impact on their long term wealth.

More competition, higher standards of condition, static values, and a higher interest rate when they purchase. That is the answer to the question, “What are four things that all sellers want to avoid?”

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