Should I sell my house now or wait for the price increase
Q: I am thinking if I should go ahead and try to sell my house right now. My girlfriend who is an office manager for local RE/MAX tells me to wait. According to her, the ongoing buzz in the office that housing is improving and prices have stabilized and are about to go up. The same story is in many media reports I have read. This is my first house, I bought it about 18 months ago and would just about to break even should I sell, considering all the expenses involved. Somehow I am a bit leery to keep it.
A: RE/MAX experts ..., I am still to meet a realtor, and I have met and talked to so many, who would think that housing market is not going to improve. Should I sell my house now is the million dollar question and I would say yes, you should. Then again, sounds like you are a young person who didn't buy this home on the top before the crash. I will give you my spin on housing market and you decide yourself. And not only I do not see any price increase coming, but further decrease is much more likely. The only question is how severe it will be.
Should I sell my house now or wait - good news or are they?
First, I must tell you that housing market will likely worsen, that is, prices will go further down, unsold inventory and foreclosed homes will grow. Just one man opinion. Now, I read every rosy prognosis or report that claims,
- home sales rose more than expected in March, reversing 3 months of declines, kicking off a strong spring selling season
- sales of existing homes rose 6.8% to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December
- sales for February were revised downward but only slightly to 5.01 million
- realtors expect this spring selling season to be the most active in recent years
- housing market is likely to keep improving through the first half of the year
- tax credits for first-time buyers and low mortgage rates fuel purchases
Should I sell my house now or wait - what I think will happen
While the average sales price stood at $170,700, up some 4% from $164,600 a month earlier and unchanged from $170,000 in March 2009, and sales rose throughout the country, you must realize that government incentives of a $8,000 credit for first-time buyers and $6,500 for current homeowners willing to buy and move into another property are expiring very soon. Buyers must sign contract offers by April 30 to qualify. Either sum is quite substantial, and once it is gone, the sales which are now up 18% from their low in early 2009, but are still down 26% from their peak in fall 2005, will plummet in my opinion.
Then, the inventory of unsold homes on the market was up 1.5% at 3.6 million, which is an 8-month supply at the current sales pace. But the real news were that U.S. properties subject to foreclosure action in the first quarter rose 16% from the year-earlier quarter and 7% from fourth-quarter 2009. All in all, foreclosure filings including default notices, scheduled auctions and physical repossessions by lenders, were reported on more than 932,000 properties in the quarter.
Finally, consumer bankruptcy filings in February 2010 were up 14% over the year-earlier period and are expected to surpass 1.5 million filings for 2010. So far, for the first quarter of 2010, new filings increased 10.7% over the same three-month period in 2009. Granted some of these people will try to hang on their homes for a while, after all that is why bankruptcies are filed in many cases. But with house prices continuing to go down, they will not be hanging around for too long.
So, in my view you should have sold your house by now. You can still try or just stay there, at least you can itemize your tax deductions. As they say, a picture, in this case the three charts, is worth a thousand words. Look at those, they depict Cleveland, Chicago and Atlanta declining home prices. Living in a greater Chicago area, I do not need any convincing. You can find Seattle, Las Vegas, Washington DC and Detroit here. The blue line on each chart says it all.
Mon Apr 26, 2010 12:04PM | Copyright: www.bad-credit-advisor.com | More in Personal Finance | Comments (0)
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