As I drive to work everyday, I see new construction all around me.
Is there a demand for the excessive supply in the market?
I really feel sorry for homeowners that purchased property three to five years ago thinking that they would be able to get out of it around now - with a profit. Unfortunately, that is often not the case. I receive calls from homeowners wondering why their property is not appreciating at the same rate it had for the past few years. All you have to do is go to your mail box - look left, then look right. Within 500 yards, you will see countless for sale signs and more than likely a few construction crews.
In the current market, homeowners are going to have a difficult time selling their home at market value when competing against new construction. It's like going to the tire store and having to choose between a used tire and a new tire. Sure the used tire was only driven a few hundred miles but for a few dollars more you can buy a tire that has not been road tested. In our consumer society, the consumer is more likely to take the new tire at a premium.
I am not saying that you won't be able to sale your home. I am saying that you should set realistic expectations when preparing to do so. Your selling price can not be an emotional number. It has to be based on what houses are currently selling for. Currently. Not what your neighbor sold his home for six months ago.
Additionally, I would advise homeowners to be cautious when remodeling. Simply replacing fixtures and appliances within your dwelling will not make it comparable to a newly constructed home. If you find yourself in a position where you need to sell immediately, rather than put excess dollars into remodeling, put those dollars toward your principle and discount your sales price. You may break even in the end if you receive multiple offers but you may not lose as badly as keeping the home on the market several months and continuing to make mortgage payments.
Appraisals By Michael offers affordable consulting services to assist clients with making those decisions. We can provide advice on which repairs will increase your market value as well as an analysis of the value that the market will bear over the coming months so that your property does not remain on the market longer than necessary.
Thank you, we'll be in touch!