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Is it a Good Time to Sell Property?

With buyers extremely motivated to buy, and the fact that they have a deadline to meet to qualify for the tax credits, why would sellers wait until spring, when those tax credits expire, to put their home on the market?

If people intend to sell their house, why wait?

The usual reasons:

  1. Sellers don’t want to be bothered during the holidays
  2. They wait for the weather to get better
  3. They think the best time to buy or sell is in the spring --- but is it? When there are more homes for sale competing for the same pool of buyers?

Serious buyers don’t stop looking to buy.

What sellers may overlook is that serious buyers don’t stop looking.

More importantly, during this time of the year, there are fewer homes on the market; hence, less competition. When there are fewer homes to choose from, the chances are there will be less opportunity to negotiate price.

It’s the classic supply and demand principle that drives price. The high demand and low supply usually result in a higher price.

Is it a seller’s market? Again?

The shorter the months’ inventory, the more it would appear to be a sellers market. For homes priced under $300,000, there is a mini-tsunami of foreclosures and short sales that resulted in multiple offers at above list price.

So, how does the market look for detached single family homes above $300,000?

Here’s a look at some East Bay cities and their months’ inventory and the average days on market (DOM) that homes stay on the market before they have accepted offers, as of end of November 2009:

Months inventory of homes for sale
Average days on market (DOM)
San Leandro
Walnut Creek
San Ramon

At a glance, one may surmise that the advantage may be on the seller’s side in terms of the length of time it takes before a property sells.

Are tax incentives driving this movement?

According to the National Association of REALTORS (NAR)
First-time home buyers reached the highest market share on record during the past year, according to the latest consumer survey of home buyers and sellers….The number of first-time home buyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, and was the highest on record dating back to 1981.”

We should consider factors such as:

  1. The home buyer tax credit incentives contributed to buyers’ motivation in buying a house.
  2. Interest rates are some of the lowest they’ve ever been in the last 40 years
  3. Home prices are significantly less than they were a few years ago, and are deemed more affordable and reasonable
  4. More homes for sale, and the thought of getting good deals by buying a foreclosure or a short sale

It may be too early to determine if the expanded home buyer tax credit of $6,500 will urge repeat buyers to buy property. Some people believe this tax credit is unnecessary while others will take the position that such tax credits help to stimulate the demand for housing. Regardless, qualified buyers are well aware that they must be in contract by April 30 and close by June 30, 2010 to be eligible for the tax credit.

The question bears repeating: why would sellers wait until spring, when the home buyer tax credits expire, to put their home on the market?

Pacita Dimacali - e-PRO, SRES, CDPE, MBA East Bay, North CA real estate. Serving Alameda and Contra Costa Counties. Helping clients with their real estate needs. Experienced and seasoned short sale specialist. Call for exceptional real estate service and results! Office phone: (510) 748-1148

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