With the world having turned upside down over the past year, you may be taking stock of your life and considering major life choices.
Should I change my job?
Should we have another kid?
Should I sell my house and move to another town?
Any large life event is one that should be carefully considered. In this article, we’ll look at whether now is a good time to sell your house by breaking down reasons to sell — and reasons to wait.
Examining the Housing Market in 2022
The coronavirus pandemic brought an unprecedented demand for housing as more people needed houses that would accommodate the shift to working from home as well as kids attending school at home. Also, historically low-interest rates contributed to the sudden demand for housing.
Larger homes in the suburbs became a hot commodity, which raised the pricing for homes nationwide. The median house price rose 14.9% from August 2020 to August 2021. While the initial price hike has cooled a bit, experts believe that prices will still remain higher than normal through 2022.
So to summarize: houses have been selling like hotcakes throughout the pandemic. This could provide a good opportunity to sell your house in some situations…but if you’re selling so you can buy another house, there’s more to dig into in order to answer the question, “should I sell my house now?”
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3 Reasons to Sell Your House
Now could be the smartest time to sell your house, depending on your specific situation. Here are some compelling reasons to sell your house in 2022.
Reason #1: Your House is Worth More Now
As you saw above, houses are now worth significantly more than they were a year ago. This isn’t the norm. If you wait to sell your house, you might see it go down in value from where it is now once demand cools. Do you want to take advantage of this rare opportunity or wait it out?
If, due to the spike in value, you have significant equity built in your home, it could be a great time to cash out and buy something else.
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Reason #2: A Few Minor Repairs Could Increase Value
Even though your home is already likely worth more than it ever has been, you can even get more value out of it if you make common home repairs like replacing pipes or a water heater.
Also consider revamping your kitchen or bathrooms, since those are big influencers for people looking for a new home. Even a fresh coat of paint can breathe new life into your home and make it all the more appealing on an already hot market.
Reason #3: Houses are Selling Fast
Looking to sell quickly? Now’s the time. Houses have, on average, only been on the market for 17 days before selling. Just be prepared to have to move out quickly and make sure you have a plan for where you’ll live next.
3 Reasons You Should Wait to Sell Your House
While there are some great reasons to sell your home right now, it may not be the right time for everyone. Here’s why you might want to wait.
Reason #1: You Can’t Afford to Buy
Selling in a seller’s market is great…but not so great if you need to buy another house, especially if you’re staying in the same area. Buying a house may be cost-prohibitive for you, especially when you factor in closing costs on top of the inflated pricing.
On the other hand, if you live in an expensive area, you could sell your home and move to another more affordable state.
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Reason #2: You Owe More Than You Could Sell For
If you are upside down on your mortgage, selling won’t provide a solution. You may have taken out a second mortgage or not have paid enough on your first mortgage to recoup the expense by selling, even at an inflated price. That means you would still owe money on a house you no longer live in after selling.
If this is the case, it may be better to build equity over time before selling.
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Reason #3: You’re Not Ready to Make Home Repairs
While making home repairs before selling could help you get more for your home, that doesn’t necessarily mean you have $30,000 laying around to make those improvements. If you know that certain repairs would help you get more for your house but you can’t afford to make them right now, it may be better to wait to sell until you can afford to invest in those home improvements down the road.
Tips for Selling (and Buying) a Home
Before coming up with your own answer to the question of “should I sell my house,” figure out how much you can afford to pay to buy another. If you can only afford a house that’s smaller than your current one, or in a neighborhood, you don’t want to live in, there’s not much point in selling only to end up worse off.
Look at comparables to understand how much homes are selling for in your neighborhood. Go to open houses to see what sort of updates and features sellers are offering so you have an idea of what to do to get your own house ready for sale.
Contemplate being represented by a real estate agent and doing it yourself. With the market so hot right now, you likely won’t need much in the way of promoting your home, and there are some great DIY sites that can cut down on the fees you pay to sell.
If you’re selling the house on your own, invest in professional photos rather than taking your own, and get the house staged (that means more than just removing all the toys and dog beds before a showing!). The better you present your home, the better the price you can command.
Remain patient if you’re also buying. It can feel frustrating to be outbid for what seems like the house of your dreams, but it’s a reality right now. Don’t force a decision — the right house will find you.
The Takeaway
Selling your house this year could be a smart financial decision, but it’s important to make sure you’re looking at the bigger picture with your finances.
SoFi Insights money tracker app lets you keep track of your spending, create budgets, and set goals for what matters — like buying your next house. Get started today.
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