Global markets have been erratic, and not one day had passed when nothing eventful occurred. It appears that this will be the general trend for the few years to come considering that economic recovery shows no signs of stopping. And one market that’s been booming for the past few months now is real estate, with average prices breaking past all-time highs across the world.
As a result, analysts, investors, and even ordinary homeowners are doing their best to navigate through the uncertainty and deciding whether now is the best time to list their homes or should they wait and time the market better. So, today we’ll be going over the factors that indicate a seller’s market and whether the benefits outweigh the potential risks you will be taking on by selling your home today.
Housing Prices Continue Rising
Nobody can deny the evident surge in housing prices, and they’ve skyrocketed to the point where first-time homebuyers are panic-buying for a good deal, with the other half worried about a potential bubble in our hands. Of course, from a traditional perspective, higher prices mean larger profit margins, so it’s definitely a seller’s market with a few caveats introduced by the new normal.
• Increasing Demand And No New Listings: One quick search for houses for sale online will immediately show you the ever-increasing demand for homes, but as you scroll through the listings, you’ll also just as quickly discover that they’re either in bidding wars or none available at all. And this interplay between homebuying demand and the severe shortage in housing supply has been one of, if not the most, impactful factors driving prices higher.
• Construction Materials Equally Expensive: Housing developments have been on the rise lately. The fact that we’ve been underbuilding for the past years has only magnified the need for new homes. However, depleted supply chains and restricted global trade have made construction materials equally expensive. With basic building materials like lumber and steel becoming more costly, the valuation of new homes also rises in proportion.
• Loosening Covid-19 Restrictions: Last but not least, the loosening Covid-19 restrictions and the easing of lockdown measures has generally created a bullish sentiment for the overall markets as people get the opportunity to step outside again. Therefore, with consumer spending now on the rise in the new normal and the majority of the population harboring a more positive outlook, this has also managed to push housing prices higher.
But, What Are The Risks To Selling?
Nevertheless, despite the housing price growth supported by many reliable push factors, the real estate situation is not as black and white as it seems, and there are risks to selling your home today despite the appearance of a seller’s market. So to give a fair comparison and a comprehensive overview on whether to sell or hold, we must also account for the potential risks you’ll be taking on if you choose to list your house right now.
#1 Zero Guarantee Of Getting A New Home
Although you will undoubtedly sell your home much faster than you’d expect and at a price you’ll be ecstatic to take, there’s still the notion of buying a new one. And regardless of whether you plan on bidding for a much higher price, it just goes to show that there’s no avoiding competition and the risk that available listings don’t meet your requirements. Furthermore, if the housing situation goes from bad to worse, then you’ll be on the short end with either no new home or purchasing one that eats too much of the profit you made.
#2 Readjusting To The New Normal
We’ve all been through the challenge of adjusting to the new normal, from setting up our very own home offices to finally syncing up with a manageable schedule; it’s been rough, to say the least. However, if you do manage to sell your home and downsize to a much better one, you’ll have to face the consequence of readjusting all over again. And unless you’re ready and willing to take on that stress, then it might be too big of a change to take right now.
#3 Current Financial Position
Lastly, while most governments have done their best to back first-time homebuyers and make the process less financially burdensome, sellers also have to consider their current financial position before listing their properties for sale. For example, if you’re currently working through multiple loans and obligations, then liquidating such an asset like your home might not be the smartest way to go about it.
The Verdict: Weigh Your Opportunities Against Threats
In conclusion, the answer ultimately falls on “it depends,” so you’re better off weigh your personal opportunities and threats that directly affect you. So always do your due research and diligence before deciding to sell your home today.