Since the Salt Lake County real estate market started its recovery in 2012 I’ve had the opportunity to help a few homeowners time the sale of their home or condo in order to increase the amount of money they sold it for. The market as a whole only goes up and down gradually, but the value of an individual home or condo in a specific area can move up or down more dramatically, and that’s why market timing opportunities sometimes exists.
When I go out and meet with a homeowner to discuss selling their home, I give them an estimate of what their home is currently worth. If the price meets their expectations, we prepare their home for sale and put it on the market.
On occasion, the homeowner isn’t quite ready to sell or needs to get more out of their home than its current fair market value to make it worth selling. If that’s the case, I offer to track the value of their home for a possible future sale when their home is worth more. During that time the seller can work on making the home ready for sale, so it’s ready to go when they are ready and the value is there.
Market timing and value tracking strategy only works if the value of the home is going up and the homeowner has the time to wait for the fair market value of their home to meet their expectations. I’ve seen individual properties increase in value by 20% in just six months, but increases of 3% to 8% are much more common. Sometimes the value declines or stays the same depending on the year and time of year we start tracking. I watch inventory levels and prices over time and keep the client updated either way.
I have had some great results with value tracking and market timing in the spring of 2012 and the spring of 2013, but during 2014 this strategy wasn’t as effective because the market didn’t increase much. Coming into the spring of 2015 I’m tracking the value of properties for a few clients and it’s starting to look like this might be another year that this can be an effective strategy.
It’s hard to know if market tracking will be successful within the time frame the seller has to move, because the market will only do what the market’s going to do. I’ve had the most success with this approach when the tracking starts months in advance of selling. The market doesn’t typically move much in a month.
I find that the first half of the calendar year in spring, when housing prices often naturally increase, is when most of the homes end up being listed for sale. If housing inventory levels are low for the home we’re tracking and it’s in an area and price range where buyer demand is high and homes are moving, the rate of success is higher.
If the homeowner’s timing to sell is flexible, this can be a good strategy to consider. However sometimes the homeowner has more important things to consider. If someone is relocating their family to another city, it might not make sense to try to time the sale if it doesn’t match up with what the sellers other goals. If the homeowner has identified a new home and needs to sell their existing home in order to buy it, waiting might not be good a choice. How much will the replacement home cost in the future? Is the seller moving up or moving down? Also, it’s usually safest to buy your new home and sell your existing home in the same market. Prices can change and so can interest rates. There are many factors to consider.
If you are wondering what your home is worth, have any questions about buying or selling real estate in and around Salt Lake County, or if you would like to track the value of your home, contact me.
If you found this article interesting and would like to keep up to date with the Salt Lake County real estate market, I typically post two to three times a week on my SLC Homes Facebook page and you can find that at:
Realtor Broker CRS MBA
M: (801) 243-0699
O: (801) 466-8977