Ilyce Glink and Samuel J. Tamkin
Welcome to 2022, and another year of the housing market favoring sellers over buyers.
As we learned last year, the housing market is 6.5 million homes short, according to the National Association of Realtors. Redfin reports that buyers are facing the lowest number of listings ever, with the number of active listings dropping 27% from a year ago. An example: before the pandemic, a community on the North Shore of Chicago had 130 homes for sale. Today there are less than 15. According to Redfin chief economist Daryl Fairweather, the number of homes for sale in Austin, Texas is also extremely limited.
It’s Economics 101: Too many qualified buyers looking for too few homes means home prices will continue to rise as long as interest rates don’t get too high. If they do, the housing market will eventually slow down and even out.
Will it happen this year? According to the Federal Reserve Bank, it is likely. Especially since newly released minutes from their December meeting show they are rethinking when to start raising interest rates to help curb high levels of inflation. Some economists believe the Federal Reserve could pull the trigger and raise interest rates in March, with more increases to come.
But even as home price appreciation slows, home sellers have done extremely well since the first quarter of 2009, during the Great Recession. According to the Federal Reserve Bank of St. Louis, the average price of a home sold in the first quarter of 2009 was $257,000. In the third quarter of 2021, the average price of a house sold was $453,300, an increase of 76% in 12 years, or just over 6% per year. This is well above the rate of inflation over the same period.
Sellers selling in 2022 should, in most communities, be able to sell with relative ease in the first half of the year. That could be a bit more difficult heading into 2023, depending on how quickly interest rates rise.
If you’re selling this year, keep these New Year’s resolutions in mind for easier, faster selling:
1. Price your home correctly. If the past few years have proven anything, it’s that buyers will pay almost anything for a home. Bidding wars were common. They may be less so in your community, so pay attention to the numbers your agent brings to the table.
Pricing your home competitively can generate more offers than the list price. What you want is to generate interest and visits, and a “pie in the sky” price won’t do that, even with the shortage of homes for sale.
2. Make your home stand out online. There may not be many homes for sale, but you want yours to be noticed for all the right reasons. Anyone who looks around your neighborhood will see that your house is for sale. But they’re probably pretty seasoned buyers at this point, and they’ll quickly be able to tell if your home is a possibility.
So do what you can to make your house look as clean and polished as possible: clear your house of all personal effects and artwork, clean half of the furniture (or all of it, in some cases) , repaint the walls white, polish the floors, and place neutral bedspreads. Deep clean your home, grout dirty tiles, and replace carpet as needed. Replace old fixtures with modern LED fixtures. Open the window blinds (or remove them) and clean the windows.
Charming exteriors will get noticed faster, and if potential sellers make a drive-through tour, your home should dazzle them to stop for a closer look. For this, fix everything that is broken. Repaint where necessary. Be sure to shovel the driveway and driveways so potential buyers don’t have a hard time showing up at the front door. Once spring arrives, plant colorful flowers and edge your lawn. Decide if your front door and walkway could use a freshen up with a lick of paint or a more complete refresh.
3. Decide in advance what is the minimum acceptable selling price, then stick to it. One of the biggest mistakes salespeople make is letting greed take over. Either they set the list price too high and then have to go through painful rounds of list price reductions, or, once an offer comes in, they fight tooth and nail for every last dollar instead of negotiating to close the deal. case.
The best thing you can do is decide what is the minimum price you would be willing to accept. Write down that number and when the first offer comes in, look at that piece of paper and see how it compares to the offer. If you are at or above your minimum acceptable price, you are in good shape. Everything else is gravy. And, if you get your minimum acceptable price, we think you should relax and feel good about the deal.
We believe the best real estate deals happen when everyone leaves happy. As a seller in 2022, decide to leave your home, grateful for the time you spent there and for the buyer who will look after your home in the future.
Contact Ilyce Glink and Samuel J. Tamkin through their website, BestMoneyMoves.com.