Selling my House in 2019
Predicting the future of the U.S. economy is touchy, if not impossible- specially when it applies to the housing market. Before we get into the details, I will preface this post by saying this: if you are fully prepared to sell in 2019, I advise moving forward with the sales process prior to 2020. Why? Economists and real estate experts are recognizing that the U.S. economy will most-likely encounter a recession in 2020, or maybe even as early as the end of 2019. Interest rates are also expected to rise. Some experts argue the gate-crash will not come until 2024 -2 026, you don’t want to be caught on the wrong side of a recession so don’t get greedy if you’re ready
Fortunately, in my markets located throughout both Raleigh and Charlotte, NC we do not experience as volatile swingings as homes like Las Vegas and Atlanta. You’ll want to really understand your market before diving into policy decisions.
Of course, there is no guarantee that the recession will hit. But experts are increasingly pointing in that direction. According to billionaire investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associate, the likelihood that the U.S. will participate a recession before the 2020 presidential election is very strong. During an appearing at the Harvard Kennedy School’s Institute of Politics, Dalio expressed that he belief the likelihood of a recession could be as high-pitched as 70 percentage.
So, you might ask the following: if I do feel fully-prepared to sell this year, what the hell is that process look like? What should I anticipate? What paces do I need to take to sell my home?
Below, I address some of the key factors you should look out for when preparing to sell your dwelling this year.
Fewer Buyers in the Market
In 2018, I noticed a slowdown in growing and fewer customers entering world markets. I think that this trend will continue into 2019, who is able to both good and bad for vendors. Here is the good news about having a smaller buyer’s market: the buyers who are active in the marketplace this year are very motivated to buy and, in effect, will have lower negotiating power. Therefore, you as the vendor will probably be able to obtain a higher selling price.
Purchasers will most-likely feel the pressure of rising interest rates in 2019. This, in turn, will be generated them to push the sales process along faster so that they can secure a mortgage before an interest rate spike. Interest rates have been an upward trend over the past year and will continue to push in that direction, incentivizing both buyers and sellers to move quickly.
Interest rates are currently at their highest level since February 2011. Although the current rates aren’t monumental and are extremely low when compared to the historic high-pitched of 18 percent in 1981, the following is projections that they will continue to increase throughout the next twelve months.
2019 is projected to see a higher number of millennial customers than in years past. Millennials are now reaching the appropriate age to afford homes and will make up the larger share of home purchasers.
New Loan Processes
With the influx of millennial residence purchasers in 2019 and with interest rates rising, more options are becoming available to first-time home purchasers. Mortgage lenders are also coming up with new methods to streamline the application process for first-time home customers and ensure their creditworthiness.
With that in head, should I hinge my decision to sell on the millennial sell? Will millennials buy dwellings in 2019?
I do not advise basing your decision to sell your residence off of the millennial marketplace. Most millennials are still attempting to manage the financial pressure of student loan debt, credit card debt, and more. Additionally, the millennial sell oftentimes tends to favor independence over stability. In other words, they seem to lean toward renting vs. buying, which gives them flexible and the option to move from city to metropoli at will.
According to the U.S. Census Bureau, as of late 2018, the homeownership rate was at 64.4 percentage. This rise in homeownership is a plus for renters, as they will have a smaller number of fellow renters to compete with and will most probably have more bargaining influence when responding to monthly rent, broker’s fees, amenities, concessions, and more. If you’re currently a landowner considering selling your home, read this.
The millennial generation is also more inclined to change undertakings, or even change their entire career course, far more than prior generations. It wasn’t uncommon for individuals in the 1970 s or 1980 s to expend twenty or thirty years working in the same office. Now, however, millennials are far better inclined to switch occupations after only two or three years. Many even choose to change their entire job route or may should be going to school to assure a master’s degree when they reach their late twenties or early thirties. Millennials are also waiting until later in life to get married and have children which, in turn, oftentimes has a direct correlation on their decision to buy a dwelling.
With that said today, although I do not believe a residence selling decision should be hinged on the millennial sell, this is gonna be increased activity among millennial customers and first-time homeowners in 2019.
What are some other factors I should consider when selling my home in 2019?
You may hear strong return on investment if you purchased your home during the recession.
If you purchased a dwelling during the recession of 2008, you most probably had a very low interest rate. Even if you bought a home only a few years ago in 2015, you probably still benefited from lower home costs as the economy was still in recovery. If this applies to you, every mortgage pay you construct increases your equity in the home. Additionally, if you have made any redevelopments to the home, you will most likely be able to sell your home for a considerably higher price. Take the factors mentioned here and combining them with the impending dread of an unstable economy and you most-likely will see considerable returns if you choose to sell your dwelling this year. The more you net from the sale, the higher down payment you can put towards your next dwelling, constructing you a more plea prospective client to lenders and increasing the likelihood that you will have a lower interest rate and smaller monthly payments. It is likewise less likely that your lender will require you to purchase private mortgage insurance, which is oftentimes required of first-time home customers or buyers who cannot afford a large down payment.
Carefully consider the timing of the sale
Both buyers and sellers alike tend to favor the spring and summer months over the late fall/ wintertime when it comes to acquiring a residence. Moving into a new home is stressful enough, and having cold, snowy climate on moving period can be a nightmare. If you are fully prepared to sell your residence, I recommend putting your home on the market now( in January/ February/ March) so that customers can strike a deal in the spring or summer before the climate turns cold. If you live in a market where it is warm all year, the winter will still alter dwelling marketings, especially starting in October as individuals gear up for the hectic vacation season. If you receive an present on your home in the spring, you will probably have greater inventorying make their own choices when you stimulate your residence buy as well.
On the flip side, there are some benefits to shopping for a home in the off-season. Although the inventorying may be lower and you will have fewer residences to choose from, you will most likely have a smaller number of buyers to compete with as well. Therefore, you might be able to strike a deal that you would not be able to secure otherwise. So, if your home still hasn’t sold by midway through 2019, don’t be alarmed. Although it is ideal to secure a brand-new residence before the potential recession in 2020, you should not make any hasty decisions. This delivers us to our next topic:
I can’t be determined whether l feel ready to sell yet. What should I do?
If you aren’t fully prepared to sell your dwelling and don’t have extenuating circumstances forcing a move, I recommend waiting a few years until you sell your home. The 18 -year real estate market cycle is a real thing and if you’re familiar with Fred Foldvary you know he called the 2008 recession and he’s calling a 2026 recession.
Or, if you have a strong fiscal cushion, renting out your dwelling might be a smart decision. Although there are of course various risks involved with becoming a landlord, leasing out your home at the highest price could provide income towards your next home purchase. There are many factors and expenses you will want to consider when deciding if renting your dwelling is the best option such as the home’s mortgage, if applicable( principal and interest ); repairs and upgrades, taxes, homeowner’s association costs and handling fees( if applicable ), and various other miscellaneous expenditures such as the costs involved with extending a prospective tenant’s credit report, etc.
Combine these expenditures together and ensure that your tenant’s monthly rent transcends that sum. Also, account for vacancies if it takes longer than anticipated to find a tenant and the dwelling sits empty.
Am I ready to sell my home? Consider the following factors carefully when considering whether or not you are prepared to sell your residence.
Do I have a real estate agent I trust?
This will be especially applicable as we head into a bumpy economic sell in 2019. It is extremely important that you have a knowledgeable, trustworthy, and experienced agent by your back guiding you through your dwelling selling process. Although not entirely necessary, it is an added plus if the agent successfully procured homes for patrons during the recession of 2008 and has suffer working in challenging economic climates. Although I, of course, do not believe that the potential downturn of 2020 will be anything close to what the U.S. experienced in 2008, it is always an added bonus to have someone by your back who has been through the market’s ups and downs.
Take the time to interview multiple real estate agents and ask them various questions. If you feel strongly that they are competent, driven, and have your best interest at heart, then they will most likely defined you up for success during the home selling process. I also strongly advise against trying to sell your dwelling on your own during this impending volatile market, as you put yourself at risk for leaving a considerable amount of money on the closing table. Additionally, you will want an expert’s opinion when selling your residence and will crave the backing of someone who can guide you through the process.
Am I prepared to put in the necessary work to build my home ready for purchasers?
In addition to being prepared to manually do some of the necessary work in your residence, do you have enough money saved for repairs and upkeep while your home is on the market? Even apparently small details such as putting brand-new faucets on the bathroom sinks and putting a fresh hair of paint on the walls can go a long way. Doing some small-minded necessary upgrades such as these will help the buyer envision themselves in your residence and will put them at ease knowing that they have less to worry about when they move in.
Here are some other factors to consider when deciding whether or not you are prepared to sell this year:
Your household is growing
If their own families is growing- whether that be with children, pets, in-laws moving in, etc.- and you feel you might outgrow your home in the next five years, I recommend selling now. Selling in 2020 and 2021 during a down sell, the presidential election and the pressure of a developing family could conduct “youre going to” induce some hasty, financially unwise decisions, and could lead to losing money in the long-term.
You foresee divorce or separation
This is a tough one. It is certainly oftentimes difficult or even impossible to know exactly which direction your relationship with your spouse might be heading. However, if you and your marriage have spoken seriously about the prospect of divorce or breakup, it would be wise to sell your home now. Handling the stress of a divorce is much to take over , not to mention the legal fees involved, plus the added stress of trying to sell your home in a bumpy economic marketplace. These layers of stress can be otherwise eschewed if proper formulations are put in place now.
There is a chance your job will relocate you
This is also frequently impossible to predict, but if your boss has mentioned the possibility that you might be relocated in the near future, I recommend having a serious exchange with your bos. Ask if the possibility of relocation will be definite and when you should expect the move to happen. This conversation may be awkward or premature, but it is necessary and highly advisable as we enter this potentially unstable sell. With so many folks moving to our area we have had this often, on both the buying and selling side.
Regardless of the economic marketplace, I strongly believe that if you are not in a financial position to sell your residence, the process should never be hastened. Selling your dwelling is a major decision and one that should not be taken gently. With that being said, if you are in a strong financial position and have put the proper formulations in place to sell your residence, I recommend moving forward with the process in 2019 as opposes it 2020 or 2021. As interest rates increase throughout this year, homeowners may find an increase of $ 50 or even $100 per month in their mortgage pays. Although this may be a small amount to some, this will be very significant to other persons and may obstruct them from being able to afford their monthly mortgage payments down the line. Therefore, I urge you to take the necessary steps to set yourself up for financial success this year. Weigh your options carefully, speak with a real estate professional, and take careful inventory of your finances. I wishes to receive the best of luck
Oh, and for those of you buying a home in 2019 – we author about that too
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