If you’re a homeowner who wants to sell your house in the foreseeable future, it could be hard to figure out the right time, especially in the current housing market.
Though soaring interest rates for mortgages have priced out many prospective homebuyers, there is still high demand for houses due to limited supply. According to the National Realtors Association’s report on homebuyers and sellers for 2023, homes were on the market for a median of two weeks before being sold, and the final sales price was a median of 100% of the final listing price.
The prime time to list your home is based on a combination of personal circumstances and local housing market conditions. We’ll walk you through what home sellers should consider, the selling process and tips on finding a good time to sell.
When is the best time to sell a home?
Selling a home requires careful consideration. But your personal situation isn’t the only factor to keep in mind. Other factors to consider include the local market and market trends overall. Let’s look at some of the most common things to take into account before you sell your house.
Personal needs
Unless a home is purely an investment property, the decision to sell your home is usually determined by personal circumstances, said Andrea Saturno-Sanjana, a New York-based broker with Coldwell Banker Warburg.
For example, you might need to sell your home due to a job relocation, or you may need to downsize to get a more affordable living situation. On the flip side, you might need a larger home to accommodate a growing family.
The season
In most parts of the country, the best seasons to sell are spring and summer. According to Zillow, the optimal time to sell a house is in March, but if you want to make a larger profit, July is a good month to put a house on the market. Fall and winter are considered the worst times to put your home up for sale.
When more buyers are looking for a home during those warmer months, it will help sellers get a better price, said Phu Nguyen, a real estate consultant with Momentum Realty So Cal.
But there are upsides to listing a home in both peak and non-peak seasons.
Though the busiest seasons bring out the largest number of buyers, there are also more listings for them to choose from, said Saturno-Sanjana. “A seller might also consider listing their home when there are fewer homes available to compete for the attention of buyers, and the buyers looking are very serious about the home search.”
If you have less flexibility in timing, you might have to sell when it’s a slower time of year, said Saturno-Sanjana. That could be the case if you need to use the proceeds from the sale for another investment, or if you inherit an estate and prefer to sell sooner rather than later.
The housing market
The basic rules of supply and demand come into play when selling a home. Sellers tend to get a better price and maximize their earnings when existing inventory in the local housing market is low, said Chelsea Shang, a real estate consultant with Momentum Realty in Southern California.
“Generally, a balanced market needs to have a four-to-six-month supply,” she said. Shang noted that the current supply of single-family homes in Los Angeles County is lower than that, so homes are moving fast.
What should I consider before selling my home?
To make the home selling process go more smoothly, take a look at market trends and speak to a local real estate agent. Here are some of the factors they might tell you to consider.
Inventory
The existing supply of single-family homes in the US is still low. According to data from NAR, while the number of housing units in the country between 2012 and 2022 grew by 8.5%, major metropolitan areas continue to have moderate to high housing shortages. Low inventory corresponds to greater demand, which means houses can be sold faster or for a higher price.
Mortgage interest rates
Because of high mortgage interest rates, homeowners are holding onto their properties instead of selling -- they don’t want to lose the low mortgage rates they secured when they purchased their homes years ago, said Annie Cion Gruenberger, a broker with Coldwell Banker Warburg.
However, the mortgage rate equation might not apply to everyone. “If you are a seller who won’t need a mortgage for your next home, it is a great time to sell due to limited inventory,” said Gruenberger.
Though the current market has slowed down for both sellers and buyers due to high mortgage rates, that should change over time.
“Market indicators point to a reduction in mortgage rates this year, and with the pent-up demand -- by buyers and sellers -- the market should pick up, and prices will likely come down,” Gruenberger said.
Other market conditions
When there’s greater uncertainty in the economy and in people’s lives in general, buyers and sellers tend to hold off, Shang said.
The end of 2022 was a prime example. The credit markets were tightening, interest rates were rising, borrowing costs were becoming more expensive, and companies weren’t making as much money because people had less money to spend.
“Under those conditions where you have double uncertainty, we saw a decline to the lowest real estate activity in a long time,” said Shang.
Home prices
The median existing-home sales price increased 4.4% from December 2022 to $382,600 in December 2023 -- and prices are likely to keep rising. Because of high mortgage rates, about a third of buyers are purchasing homes in all cash.
If you live in an area where homes are selling quickly, you might need to be flexible regarding your asking price. However, if you live in an area with low inventory and a housing shortage, you’ll likely see a bidding war, making it costlier for the buyer but advantageous for the seller.
Is today a seller’s market?
Typically, a seller’s market is when there is greater demand for homes than there is supply. Because mortgage rates are so high right now, there are fewer buyers shopping for homes, with many buyers stuck on the sidelines waiting. However, experts say that even though homes are currently quite unaffordable, sellers are at more of an advantage than buyers because existing housing inventory is low.
However, everything depends on a buyer’s financial situation and overall housing needs within a specific geographic area. If first-time homebuyers in a particular housing market can’t afford upfront costs or mortgage payments, that could limit the competition for homes, making it less of a seller’s market there.
4 tips for home sellers
1. Talk to a real estate agent
If you plan to sell your home, ask an experienced real estate agent to conduct a detailed analysis of local market conditions, including inventory and home prices. “This analysis can form the basis of a conversation between the seller and their agent,” said Saturno-Sanjana.
Working with the right agent can help make the entire process smoother and help you make more money in the end. “Interview a couple of agents before you decide to work with one, because you do have choices,” Nguyen said.
2. Improve your home’s curb appeal
Sprucing up the interior and exterior of the home can make your home more attractive to potential buyers -- and increase your asking price. When you invest in staging your home, it can sometimes sell 10% to 20% higher than if you didn’t, said Shang.
Plus, buyers are willing to pay the most for a turnkey property that’s move-in ready. “Simple things such as decluttering, maintaining the house, doing simple repairs and improving the overall condition can boost the value of your home,” Shang said.
3. Calculate home equity and selling costs
Remember that when you sell your home, you’ll have to account for the costs of any remodeling projects on top of other selling costs. According to Shang, you should budget at least 2% of the sale price to cover closing costs, in addition to out-of-pocket commission between you and your agent.
Having enough equity in your current home is key to ensuring you’re not losing money with a sale. A good rule of thumb is to have at minimum 20% equity in your home to help with sales costs, pay off the remainder of the mortgage and get yourself ready to buy a new home.
4. View your home through the eyes of the buyer
Do your best to view your home through the eyes of the buyer and try to remove your personal feelings and emotions, according to Gruenberger.
“Your home is being viewed as a commodity. Make sure it is clear of clutter, and remove photos of your family,” said Gruenberger. “This is both for your privacy and lets the potential buyer see it as a place they could live.”
The bottom line
There’s a lot to consider to figure out whether it’s the right time for you to sell your home. And while factoring in housing market conditions, pricing, inventory and mortgage rates, you ultimately want to tune into what your gut is telling you.
“The best time to sell is when you’re mentally prepared to sell and move on to the next chapter,” said Shang. Sellers should ultimately gauge the best time to sell based on their financial and personal situation.
