October 2nd 2023

Selling a house can be a stressful process, especially in today's ever-changing market. During the COVID-19 housing boom, sellers had the upper hand, with bidding wars and record-high prices. However, rising interest rates have left many potential sellers feeling uncertain about their decisions.

Questions like "What if I sell now and home prices rise?" or "What if I can't find a new house?" can make sellers hesitant. This hesitation has contributed to the reduced number of new homes entering the market over the past year.

If you're one of these homeowners struggling with indecision, we can help you navigate your options. Common concerns include:

Concern: Locked-in Low-Interest Rate Loan Many sellers fear losing their low-interest-rate loans. However, home owners can use their historic levels of equity for an all-cash offer on a new home or lower rates via buying down or assuming a mortgage.  Nearly 69% of American homeowners own their home outright or have at least 50% equity, giving them options

Concern: Home Prices Rising After Selling While prices might continue to rise, the escalation has slowed. Realtor.com® predicts only a modest 0.6% price decline for 2023.  In Cape May County, single family home prices have increased 9% year to date, and condo/townhomes have increased 1%.  Timing the market isn't crucial when most sellers use sale funds to buy another house.

Concern: Waiting for Interest Rates to Drop Waiting may not lead to increased prices. A sudden influx of properties on the market when rates drop could reduce prices. Currently, limited inventory and high demand have kept prices rising despite higher interest rates.

Concern: Mortgage Rates Rising Before Buying Interest rates alone should not dictate your decision. Consider your reasons for moving, like family growth, school districts, job changes, or proximity to family. Rates can be refinanced if they drop, and locking in now is wise if they rise.

Concern: Selling Quickly Without Finding a New Home In Cape May County, sold homes are spending an average of 60 days on the market, year to date, giving you some time. Negotiating a contingency clause or a longer closing date can provide extra time. Rent-back agreements also allow you to stay as a tenant after the sale.

(September data will be released end of October)

Concern: Unable to Find a New Home in the Desired Area Even in a low-inventory market, options exist. You can remodel your current home using home equity or explore new construction, which may be cost-competitive. New-home sales are rising, shifting the market.

Concern: Home Needs Repairs You Can't Afford Selling a home as-is is possible, and many home buyers are looking to put in sweat equity in the face of higher prices; but, expect lower offers. Buyers willing to invest in repairs will not make the same type of offer as someone trying to purchase a turnkey home. If major issues arise during inspection, negotiate with the buyer to find a solution, like a credit or price reduction.  

Concern: Not Getting the Desired Price Market conditions determine prices. Research comparable sales to set realistic expectations. Consider enhancing your marketing strategy with professional photos, virtual tours, or targeted advertising.  Of course, your agent's expertise is there to lean on, and they will provide you with a list of comps and will help you determine a list price based on a variety of market factors.

Remember that flexibility and compromise can lead to mutually beneficial sales. We've helped hundreds of clients over the past 25 years and would love to help you reach your real estate goals in Cape May County!