Tis This The Season to List?

Have you heard the news? Mortgage rates are falling and it is predicted that this trend will continue. Will we see the 4.5% mortgage rates as was predicted last week? May be we will. Either way, if you are contemplating listing your home, you should know that this is still very much a buyer’s market.

That being the fact, should you list your home if you don’t have to? Should you hold out until the market recovers? When will that be? Some experts are saying it could be years before we return to a healthy real estate market. Put your life on hold?

Let’s say you don’t want to wait. Now you have to ask if you should list your home in December. During the holiday season, real estate business traditionally slows down. Good to know, but this is not a traditional real estate market! So when a young Lakeview/Wrigleyville couple with a new baby called me this week asking me to give them pricing information on their town home, I thought long and hard.

A: Should we list during the holiday season? My first thought would be no. This is a slow time of the year. They may just build up market days. That usually hurts salability. If the home sits on the market, it won’t be “fresh” when the spring market kicks off. They could wind up loosing their pool of buyers who plan to start shopping after the holiday season. So, does that mean that it is better to wait until January and then reassess the market?

B: Mortgage rates are falling. Maybe the “ideal buyer” is out there waiting for low rates and this great town home. Buyers have been waiting. They’ve got money, good credit and they are ready. We should get this listing up right away!

C: Is that “ideal buyer” also going to wait for the holiday season to pass? I also wonder if that buyer will wait for rates to fall to 4.5%. So, I beg the question again, list now or wait?

Now, if we aren’t confused enough, we have to complicate matters. Every real estate professional knows that pricing a listing correctly is critical. We need to attract buyers and close the sale successfully. By that I mean getting my seller a price they can leverage in a timely manner. This particular little family would like to take advantage of declining prices in the suburbs. That opportunity exists right now! So we have to grab buyers now by correctly assessing the value of their three year old town home. And let’s face it--most home values have flattened or deflated, including theirs.

According to data from Chicago MLS, a total of only 84 new and resale condos and lofts were sold in Lakeview in October, down 39.5 percent from a year ago, when 139 units were sold during that same month in 2007. The sales price fell to a three-year low in Lakeview during Oct. 2008, down more than 6% from a year ago, nearly 10% below from the peak in October 2006.

When this family bought three years ago they got caught in a robust bidding war that drove the purchase price up nearly $15,000 over asking! Now look what’s happened. According to neighborhood comps, they have to price it below what they paid. Can they make it up on the other end?

As we talked more about their reasons for wanting to sell it came to light that what they really want is to have more children and the sooner the better. Doesn’t that change the game a bit? It does if you are measuring the quality of life. In my life, “family first” is my heartfelt motto. So, for their family I think that being extremely smart on their buy in the burbs will smooth the way to living with the loss on the sale. And they get their big house for less now while the rates are on the way down than possibly later. So with that in mind, I say, life is short! Sell the town home and never look back. Family trumps everything.

Yes, they will lose some on the sale side, but they will gain at least that much on the purchase of their larger, suburban home. It’s reasonable to assume that when values go up in Lakeview, they will also go up in the burbs, so what do they gain by waiting?
My final advice: price it right, and put it on the market now, and be open and reasonable about any reasonable offers.