You’ve been on the fence about selling for months, carefully tracking the market trends, watching the values, slowly getting your property fixed up and the rents up to market levels. Now, you’re ready to sell and you can’t wait to cash out and put your money to work somewhere else. Problem is, you’ve found yourself in the 4th quarter of the year and even worse, it’s December and the holidays are here. So what do you do? Roll the dice and try to sell now or follow conventional wisdom and wait for the spring market?
I’m here to tell you that waiting for the spring market to sell is fine, but there is often little to gain, if anything, by waiting. In fact, you could achieve the same or better results if you sell now and preempt the spring market. Here’s why:
First: Serious Buyers are Always in the Market
There’s no doubt the spring market is a great time of the year to sell, but why is that? More buyers, right? It’s the traditional start to the buying season, and investors are revved up to get out and put their money to work.
But what does that mean for you as a seller and why should that matter? To achieve your goals and get traction to sell your property, you don’t need a pool of buyers that balloons in size during a short period of the year. A larger pool of buyers doesn’t equate to a larger pool of quality buyers.
Consider the investor who receives and email from his broker about a new listing that fits his buying criteria. He might leave the office early, trudge through the snow and battle rush hour traffic to be the first person to see the property and make an offer. Compare him to the investor who’s out on a beautiful Saturday morning in April with his fiancée, touring properties and sipping on Starbucks. Maybe this guy’s a serious buyer too, but maybe he lacks a sense of urgency to make an offer, even if he finds a great property.
Mr. I’m late for the showing because I had to stop at Starbucks first, doesn’t leave work early and head out in the snow, to look at a compelling listing. He’ll lose out to one of the many serious buyers who buy when good opportunities come up, not when the flowers bloom.
You need to price right to achieve a sale in the spring market, the same as you do in December or January. Price your property right, and you could sell it on Christmas Day if you really wanted to.
Second: Less Competition is Always Good for Sellers
If I’m a seller, I want limited competition regardless of what I’m selling. Real estate valuations shot up in a lot of US cities over the past year. Macroeconomic factors like supply and demand played a big part in the run up as did ultra low mortgage rates and the risk/reward of entering the market sooner versus waiting 12-18 months and dealing with potentially higher interest rates and higher property values. An imbalance still exists between supply and demand in many cities, but the trend is reversing course.
So, now that we have are in full recovery mode and a fresh spring market is just 3 months away (sooner in some cities), think of all the soon-to-be sellers we could have. The shadow inventory buzz word has yet to make a mainstream reappearance, but you can bet there are a lot of potential sellers looking to hit the market in Spring 2014 and move their cash out of assets where it has been trapped for several years. The spring surge in listings means more choices for buyers and more competition for sellers. If the current market is flattening out (which it is), this will put added pressure on sellers to price aggressively. You can see how this cycle could quickly spin itself back into a buyer’s market.
Selling real estate during the holidays or anytime during the slower season from Nov-Feb can be very advantageous, especially coming out of a year with a big run up in appreciation. The right buyers are out there and the limited competition is a big plus in my opinion.
Where do you stand? If you’re considering a sale, are you waiting for the spring market to sell?
Photo: Jim Larrison