Watch out Laurel, Selling Your House could be a Slog this Winter

What's the best advice for someone who's buying a house? (Everyone say it together!) Wait until the winter. Why? Because it’s cold and it’s dark earlier and people don’t like doing anything in the cold and in the dark. What, you don’t believe me? It’s true. When’s the last time you went on a run at night in 30 degree-weather? Never? Well it’s ok, I haven’t either, I mean I hardly go running, but anyways moving onto my point…

First of all, I must say that I'm completely biased because I buy lots of properties, but I think it’s safe to say that the inverse of buying a house in the winter is also true: you shouldn’t sell a house in the winter if you don’t have to. Outside of normal and stable market conditions though, like the rising interest rate market we’re in, I think it makes sense. Interest rates have moved very quickly to take out a lot of buyers from the market, and it looks like a lot of them were looking at Laurel.

Two things are going on right now in Laurel's housing market that convince me that now is a good time to be selling a house if I had to within the coming months, or even year: dropping buyer demand because of the winter season coupled with the fact that interest rates have been going up quickly.

1. It’s not uncommon for home sales to fall in the winter, but the decrease in price over the last 90 days has been relatively large. According to data provided by MRIS.com, the median home sales price in Laurel slipped by $22,500 to $277,500 in the last 30 days from $300,000 in the last 90 days. That’s a 7.5% drop, which is steep compared to the 1.0% decrease for the same periods last year. Like I said, that’s a big drop.

Average days on market also ticked up from 55 days to 72 days to sell a house in Laurel over the last 90 days, as compared to last year when it actually went down from 72 days to 65 days. This means that it is taking houses nearly two and a half months to sell at the current pace. That's not very fast if you're in a rush to sell your house. In fact, I'd say that's rather slow.

2. The 30-year mortgage rates that home buyers rely on for loans to buy houses are going up at a relatively fast pace and there’s a large chance that they will continue trending up into 2019. They’ve gone from 4.1% to 5.0% in 2018, and they’ve already passed the Mortgage Bankers Association’s prediction of 4.8%. Just a few basis points change in interest rates can reduce someone’s ability to buy your house by a lot. Someone using a loan with current rates near 5.0% to buy a house at the $300,000-level, lost $10k in buying power over buying the same-priced home in September 2018 and $25k in buying power over buying the same-priced home in January 2018. These increases in interest rates directly impact the number of people who can buy your house, which can end up impacting the final price you’ll be able to sell your house for.

"So what do I do?"

First, realize that I’m not trying to scare anyone. Interest rates go up and down. Real estate moves in cycles. This year, rates have gone up a lot, which has made the buyer pool smaller, which ends up negatively affecting home prices. I think it's fair to say that we're hitting the end of a seller's market (rather hard) and diving right into a buyer's market. More sellers in the market increases the supply which gives buyers more options to choose from. All bias aside, selling a house in Laurel at previously high prices will not be easy right now.

What I would do is ask myself if I need to sell my house within a few months, maybe even a year. If I answered yes, then I would probably bite the bullet and sell it as soon as possible to move on. Maybe wait until Spring comes first if you can hold off until then, then list it on the market as soon as you can.

Sometimes we know we need to sell. Maybe we’re moving soon for a job or we need to sell our parents’ house because they’re moving to Florida or elderly care. Other times, we’re thinking of moving to a bigger house or the neighborhood down the street.

Whatever the case, this isn’t financial advice, but, yes, as far as we can tell, the data is showing that Laurel's housing market is already in hibernation mode. The good thing is that sometimes “spring” season for selling a house comes early for residential real estate and the best we can all hope for is that demand picks up in the spring or by other means such as job creation.

Do you think we're wrong or right? Call us or leave a comment below. We’re always happy to chat. Remember to tell us if you know someone with a house that needs repairs or is falling apart. We will buy it! Check us out at DC77Properties.com.