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Sell Now or Wait? What the Experts Are Saying

More and more homeowners are questioning whether they should keep their homes on the market or wait until next year to sell. The thinking obviously is that next year the market will be better and therefore they will be able to garner a higher price. But, is that true? Is there any evidence that the market will come roaring back next spring? The evidence actually points to the exact opposite. Most experts are predicting that we will not see appreciation until the end of 2012 and even then the appreciation will be minimal.

The MacroMarkets LLC co-founder and Chief Economist is Robert Shiller, the founder of the S&P Case Shiller Report. Professor Shiller surveys 109 economists, real estate experts, investment and market strategists each month for the their Home Price Expectations Survey. In the July survey, it was reported:

“The consensus indicates diminished confidence in the prospects for a near term recovery … This month, 60% of the panelists projected negative home price growth for 2010.”

That percentage was up from 40% just two months ago! 

Mean Cumulative Change from Current Price

 The survey went on to say:

“The July survey results also revealed a less optimistic longer-term home price forecast. Terry Loebs, MacroMarkets Managing Director, remarked, “Although still positive, the average outlook for five-year cumulative home price appreciation fell in July for the second consecutive month, and is now in single-digit territory. This new consensus suggests a less robust housing recovery scenario.”

The experts are predicting that cumulative appreciation will not reach positive numbers until the end of 2012 and will still be under 10% by 2014.

What does this mean to you?

If you are thinking of waiting for the market to show appreciation before selling your home, you have a two year wait not a one year wait. And if you are looking for double digit appreciation, it is five years away. Perhaps it is best to sell now and get on with the things in your life that caused you to think about moving in the first place.

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7 replies
  1. James Barath - I'm in NW Indiana
    James Barath - I'm in NW Indiana says:

    If a homeowner really believes that home prices will defy the market and sky rocket next year or even in a couple of years, the time to sell is still right now.

    Home affordability is at an all-time high (i.e. historic low interest rates, abundance of supply and low prices) and that is great for the buyer of the seller’s home. The market is also great for the seller when they go to buy their next home.

    If the seller does wait for higher prices down the road, then they will have to buy at higher prices as well. It never made sense to me the rationale behind sell high and buy high. Maybe it’s just me though.

  2. Alex Cortez
    Alex Cortez says:

    I would say that it depends a lot on the reason to sell. If it’s to upgrade, do it now. Sure, you sell at a low point but you are also buying at a low point. I just had a client sell her home (which had limited potential for long-term appreciation) and buy a magnificent home in a sought-after area (which I can see doubling in price after the market picks up and becomes stable). RT’ing this post, Steve.

  3. Jeff Belonger
    Jeff Belonger says:

    Steve… I can understand the logic to state that home prices will drop for a few more years. Consumer confidence is down… people are out of jobs.. overall, the economy is a mess. But one problem that I have with this post and experts in general. Real estate is local… from reading this post and the experts that you have quoted.. if I was a seller reading this, I would have to believe this. But wait.. what market am I in? What market are these experts referring to? Do you or these experts know that some real estate markets have actually gotten better? That home prices have increased in some areas? Shouldn’t this be talked about? Just curious… because in my opinion, this information is one-sided. And in my opinion, the fact that you have 60% of the experts agree, but not define specific real estate markets, makes this information misleading. Just curious on your thoughts about this. thanks

  4. Steve Harney
    Steve Harney says:

    Great points, Jeff! Thank you for commenting.This post is reporting on a particular survey of ‘experts’. In previous posts, I have directed readers to their local real estate professionals to determine how this news might impact their neighborhoods. Two quick, recent examples:

    In a blog post four days before, titled ‘Are You Drowning in a Sea of Real Estate Information?’ I said:

    “You must find those industry leaders in your local real estate market (both agents and loan officers) that have made it a mission in their lives to truly gather all the pertinent information for their clients and customers … Don’t get lost in the sea of information. Hire a real estate expert to help you navigate.”

    In a blog post the week before (July 19th) titled ‘Are Home Prices Actually Increasing?’ I said:

    “If you are selling your home, don’t get caught up in the headlines. Have a real estate professional that you believe is an industry leader in your market sit down and explain what is actually happening to prices in your neighborhood.”

    In regard to your comment: “Do you know that some real estate markets have actually gotten better?”

    Define the word ‘better’ so I can address this issue directly.

    In my opinion, to be a ‘better’ housing market at least four of the following have to be showing improvement:
    1.) unemployment
    2.) negative equity
    3.) months supply of existing inventory
    4.) delinquency rates
    5.) the amount of shadow inventory about to enter the market
    6.) availability to mortgage money

    I have traveled the country this past year doing 100+ presentations. I have yet to find a market that meets this criteria.

    Your thoughts?


Trackbacks & Pingbacks

  1. […] Sell Now or Wait? What the Experts Are Saying […]

  2. […] big question in real estate is what will happen with home prices over the next few months. The experts have already weighed-in predicting prices will probably take another dip down. The reasoning? Put […]

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