Money affects every aspect of the decision-making process when you are a seller.
Timing the sale of real estate whenever possible is important. Like any other commodity, real estate is subject to a wild roller coaster-like valuation. As an example, the house we purchased in 2014 as FNMA foreclosure for $92,000 was on the market for $320,000 in 2006. We paid 29% of the inflated asking price. Our house fixed up is worth about $160,000 as of December 2017 in a locally rising housing market. What do I think about the valuation of the house I live in? I think that it will increase in value. I would not be surprised if the $300,000 level would be tested at some time in the future. In 2021 the housing market saw the highest pace of sales growth since the height of the unprecedented housing boom in 2005. The pace of existing-home sales has jumped to a level not seen since 2006 and, importantly, was followed by strong pending sales, purchase mortgage applications, and construction data.
3 Major factors to consider when selling your home.
1. Valuation
Before putting your property on the market keep in mind that the unemotional objective valuation of your home makes the difference between getting an offer quickly and having a house abandoned for months, drawing little interest.
2. Emotional state
An important consideration when dealing with selling is to avoid emotions. Do you remember Wall Street saying: “financial markets are driven by two powerful emotions – greed and fear”? We had to resist the emotion of fear that housing prices will be headed lower than what we bought for $92,000 in 2014.
While 2023 brought a slight increase in residential housing inventory levels in Ka’u, South Kona, and North Kona the inventory level is still low. Buyers began scooping up the new inventory quickly. Home values remained high and sellers may take advantage of what continues to be a prime seller’s market.
3. Time to sell
When is the best time to sell? Consider economic factors such as unemployment rate, money supply, interest rates.
Is the unemployment rate improving? If so, real estate prices are likely to rise.
Is the Government expanding the money supply? If so, prices are likely to rise.
Don’t pick up a number out of the sky or from Zillow but rather base it on extensive market research.
Resisting the emotion of greed during the market bubble of 2006 was even more important.
In 2023 the housing market is largely being driven by a shortage of available housing inventory.
Fixed-rate conventional mortgages were the most common type of home loan in 2023:
(41% of homes) – Ka’u;
(50% of homes ) – South Kona
(45% of the condo) – North Kona