01 Jan Should I sell my home in 2012? Consider these 4 guidelines before you decide…
‘Are we there yet?’ Should I sell my home in 2012? How should you decide if 2012 is the right time to sell your home?
Each person’s situation is unique and sometimes complicated, I am happy to chat with you personally and help you evaluate your options. Discussing your situation will provide the most accurate answers to the question of ‘Should I sell my home in 2012?
Factors in the decision to sell a home in Apple Valley, Eagan or Rosemount might be slightly different from the factors used to decide to sell a home in Lakeville, Burnsville or Savage. The number of homes for sale in each area, current price trends and amount of competition from Foreclosures in the South of the River cities are examples of factors which can vary widely per city.
There are 4 general guidelines you can use to start the evaluation.
1)Establish your true reason to Sell. Sometimes the reason for selling is obvious such as a job transfer, loss of income or divorce. Often the reasons are less tangible or less urgent, such as needing more space for an expanding family, downsizing to less space, gaining access to a certain school district, obtaining a more open floor plan, extra garage stall or larger storage space. Recognizing the true reason you are contemplating selling your home in 2012 is the first step to making a good decision.
2)Determine all other alternatives. Before deciding anything look at all the alternatives, even the ones you are tempted to dismiss right away. Alternatives can including waiting a few more years, remodeling your home for better flow and entertaining space, adding on to your current home, open enrolling your children in the desired school district, organizing your current home, renting out the home or renting out a portion of the home to help with expenses. Just ponder all options without jumping to conclusions, there might be an option which would allow you to comfortably wait a few more years to sell.
3)Do the Math. This guideline is a must, the answers might surprise you. Add up the costs of not moving now and compare it to the costs of moving now. Include such things as your current house payment, utilities, association fees, transportation costs, homeowners insurance policy and property taxes. Next, add up the costs of where you would be living if you did sell your home in Spring of 2012. Be sure to compare all expenses. Also, consider how low the interest rate is at this time. If you would move to a long term home with a 30 year mortgage, the savings over time provided by these historically low interest rates should be carefully calculated.
4)Look at the long term picture. Real estate values began to decline in 2006, the rate of decline escalated in 2007 and 2008, values of homes in the South Metro cities have continued to decline in 2009, 2010 and 2011. Prices have not been plummeting in the past 3 years, but statistically they are still declining. If you have been ‘waiting out the market’, there is nothing left to ‘wait out’. What I mean is…there will not be a dramatic reversal with prices surging upward and home values returning to levels of 2004 or 2005.
The drama of the ‘bubble bursting’ is over and we have now settled into our long, slow, plodding recovery. It looks like the value of your home will not return to the level it was in 2005 until we reach the year 2020. This is based on the following assumptions: Home worth $250,000 in 2005, value goes down to $170,000, a 32% drop in value, (the overall decline in value in the metro area has been 32%), home begins to appreciate in 2012 (this might be too optimistic), appreciation rate of 5% per year, the home will not return to the value of $250,000 until 2020.
A recent article on msn By John W. Schoen, Senior Producer, states: Even if prices stabilize this year, millions of underwater borrowers face a long wait before they can sell their homes without having to write a big check to their lender to cover the shortfall. Economists at Goldman Sachs recently forecast that after bottoming in 2013 house prices won’t recover their 2006 peak until 2023. (No, that’s not a typo.)
If you consider your reasons for moving, all your alternatives, the true cost of staying in your current home, and the time it will likely take for prices to rebound, the choice to sell your home in 2012 may be clear.
Email me or call 612-889-6496 if you would like a personal evaluation of your home’s value or help with your decision. I’ll provide you with the best information I can and the decision will be easier.
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