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Written by Mark Sette
Top reasons to sell now | Reasons to wait until 2023 | Tips to sell your house fast | FAQs
The decision on whether or not you should sell your house now or wait until 2023 is a big one. It’s both a financial and a personal decision, with many factors to consider.
One big challenge facing home sellers is a cooling housing market amid a surge in inventory and interest rates. A record amount of sellers dropped their list price during the four weeks ending June 12, according to Redfin data.
But there are personal factors to consider, too, like if you’re moving to start a new job, live closer to family, or planning to retire.
Below, we’ll explain a list of the top reasons to sell your house now. But you should really talk to a local real estate expert to make a decision. They’ll know if it’s a favorable time to sell in your market, and what your market may look like in 2023.
If you do decide to sell soon, it’s best to hire a realtor with the skills and experience to help you get top dollar for your home, even in a shifting real estate market. Clever Real Estate can match you with highly-rated agents, while also negotiating lower commission rates for you, so you can keep more of your home’s equity in your pocket.
Top reasons to sell your house now
| Consider selling now if: |
|---|
| 🏠 Your market favors sellers |
| 👨👩👧👦 You need to upsize (or downsize) |
| 👔 You need to move for a job |
| 💸 You want to trade in an investment property |
| 💵 You have home equity to cash out |
Your local market favors sellers
There are several ways to tell if the local real estate market is tilted in your favor when selling your house.
Home prices are rising in your area
A market with rapidly rising home prices indicates strong buyer demand.
In a strong seller’s market, it’s common to see homes sell for way over their asking price.
Boyd Rudy, an associate broker for Dwellings Michigan, shares more insight. “If prices in your area have been steadily increasing, it may be a good time to sell while you can get top dollar for your home.”
A seller’s market also usually sees an influx of cash buyers who can close fast (10-20 days) and even waive certain contingencies, like a home inspection or an appraisal.
Housing inventory levels are still low
The amount of homes for sale is another key factor in determining if it’s a good time to sell in the current housing market.
An area with low inventory levels means that more buyers are competing for fewer homes for sale, which keeps home prices elevated.
However, the market has begun to shift in favor of buyers. Total housing inventory in May 2022 reached its highest level since October 2021, according to the National Association of Realtors (NAR).
“The inflation rate and expected recession are turning the real estate market into a buyer market,” explains Bill Ryze, a Chartered Financial Consultant at Fiona.
“So, sellers are confused if selling their house now is best or if they should wait until 2023 to sell,” Ryze continues. “Rising mortgage rates could soon force some buyers out of the market.”
Homes are selling at a fast pace
It took home sellers just 16 days to receive and accept an offer in May 2022, and 88% of homes sold in May were on the market for less than a month, according to NAR.
However, real estate is local, and it may take longer to sell a house in your particular market. If that’s the case, it might be worth waiting until next year.
It’s best to connect with local real estate agents to get a better idea of how long it might take you to sell in the current market.
You need more (or less) space
A growing family often requires more space for everyone to enjoy. The larger your family, the greater the need for more bedrooms, recreation areas, and outdoor space.
More space may be required if one or more family members work from home. You may also need room to move in an elderly parent or family member that needs a private area of the house.
On the other hand, downsizing is often a smart choice if the kids have moved out or you plan to retire. Purchasing a less expensive, lower-maintenance home can save you money (and stress).
Changing family dynamics have a strong influence on your decision as to whether you should sell your house now. Speak with your family to make sure that moving now is worth it.
You’re changing jobs
Switching jobs is one of the main reasons you may need to sell your house now. If remote work is not an option, you don’t have much of a choice other than moving closer to your employer’s location.
You may also want to sell to be closer to your family. Time is of the essence in these cases, especially if you have a larger role in the well-being of an elderly parent or relative.
In either situation, you may feel more comfortable selling your house rather than renting it out and becoming a landlord. You can also have an agent manage the sale for you while you’re getting settled in your new home.
You’re selling a home other than your primary residence
You may be ready to sell a second home or an investment property to cash out or purchase another home.
Selling these types of properties often results in tax impacts, but there is a way to get around it.
For example, a real estate investor can minimize their potential tax bill by trading in their investment property for another one via a 1031 exchange.
Selling a second home or investment property can also free up more of your cash to invest in other assets, such as the stock market or your business.
You’ve lived in your house a long time
Selling your home allows you to cash out the home equity you’ve built up over the years, and you may want to cash out now if your local market still favors sellers.
Capital gains tax also plays a key role in deciding when you should sell your house now or wait. Selling after 2 years of ownership means you likely won’t face a capital gains tax bill, so you can pocket more of your home’s equity.
Retirement is another powerful reason you may want to sell your house now. As you end your working career, you may be ready to buy your dream retirement home in another area or downsize to a less-expensive house.
Need help determining your home equity, and deciding whether or not it makes sense to cash out now or wait? Get expert advice from a local realtor from a top-rated brokerage like Keller Williams, Century 21, and Coldwell Banker.
Top reasons to sell your house in 2023 or later
| Consider selling in 2023 if: |
|---|
| 📉 Your local market favors buyers |
| 🔑 You haven't owned your home for long |
| 💲 You can't afford to move |
| 😊 You're happy in your home |
| 📃 You recently refinanced |
Your local market now favors buyers
A buyer’s market means there are fewer interested buyers and more houses for sale, making it harder to sell at a high price.
In a buyer’s market, sellers often compete for buyers by lowering prices and accepting less favorable terms.
Homes in this environment also don’t sell as fast as they do in a seller’s market. A home in a buyer’s market might take 2-3 months or longer to sell, compared to just a few weeks in a seller’s market.
If you don’t have a pressing need to sell your home, it could be worth waiting until the market shifts in your favor before listing your house for sale.
However, every market is different. A local realtor can help give you market-specific advice on when it’s the most favorable time to sell.
You haven’t lived in your home that long
You don’t have enough equity to sell
If you sell too soon, you likely haven’t had enough time to build up any equity in your home other than the down payment.
There are a few reasons why:
- Your mortgage payments have likely been going mostly towards interest payments rather than equity. At the beginning of a mortgage, you owe more interest as your loan balance is higher, according to the Consumer Financial Protection Bureau.
- You probably also haven’t owned your home long enough to benefit from a rise in its value.
If this is the case, you might even lose money when you sell as your home sale proceeds might not cover your mortgage and seller closing costs.
Not sure how much equity you have in your home? The first step is determining what your home is likely worth in today’s market. Get expert advice from a local realtor on what your home could sell for.
You might have to pay capital gains taxes
Expect to pay at least some taxes on a home sale if you bought your home less than two years ago and the property has significantly increased in value.
If you wait until at least two years have passed since your purchase, you’ll likely be taxed at a lower rate or avoid paying any taxes at all, assuming you meet certain IRS requirements.
You can’t afford to move
Even if your home is located in a seller’s market, you may not be in a financial position to purchase a new home. Here’s why:
- Mortgage rates have risen substantially. A higher mortgage rate means your monthly payment will be higher for the same loan amount.
- Home prices have also risen. Prices are up by 19.8% in the U.S. over the past year with the average home now costing $354,165, according to Zillow.
- You might not be able to afford the down payment. And putting less than 20% down on a mortgage may require you to pay property mortgage insurance (PMI) to offset the increased risk the mortgage company is taking.
Waiting to buy a new house gives you time to see if rates decrease in the future, and allows you to save more towards your new home down payment.
However, you should still check with a local realtor to discuss your budget, financing options, and if waiting to sell makes sense in your particular market.
You’re happy in your home
Financial incentives alone don’t mean that you should sell your house.
Even if you’ve seen an increase in your home’s equity, your current house may still be the right fit if your family has settled down and loves the area.
You may also feel that you haven’t outgrown your home yet if college is years away and you aren’t planning on growing your family. In this case, downsizing may not seem necessary as you have all the space you need.
You recently refinanced your mortgage
Refinancing your mortgage can save you a ton of money in the long run.
But you likely paid a lot of fees and interest to refinance. Selling now could negate any savings from the refinance.
If you’re considering selling shortly after refinancing, figure out your break-even point – the length of time needed for refinancing savings to meet the costs of the refinance.
Tips to sell your house fast
Find a good real estate agent
A realtor is a valuable resource, providing insights into local market conditions and whether or not it’s a good time to sell your house.
Good agents can also create a specific game plan tailored to your needs, after first learning about your personal and financial situation.
Great realtors provide you with accurate market information to help you make a decision, and won’t rush you. They’re also familiar with all of the potential pitfalls involved in real estate transactions and can help you avoid common mistakes made by sellers.
» LEARN: How to find a realtor to sell your home
Get a free home valuation
Your home’s fair market value is the main factor to consider when deciding whether or not to sell now.
Home value estimators provide a good starting point to get a general idea of your property’s value. Plug your home’s address into several sites and average the values to get a more accurate home value estimate.
However, a comparative market analysis (CMA) report goes a step further. It’s completed by a licensed real estate agent or broker, and it includes more data than a home value estimator.
A good local agent can often provide you with a free CMA. If you want to sell quickly, start by requesting a CMA report to see what your home is worth today.
Make pre-listing home repairs and improvements
Your home’s appeal and value can often be increased by making certain home repairs and improvements before listing.
Making repairs ahead of listing your house can attract more potential buyers, and helps ensure a smoother home inspection.
Depending on your budget, consider improving your home’s landscaping, transforming unused space, or upgrading the interior design.
A local real estate agent can help you decide which improvements or repairs have the highest return on your investment.
» MORE: How to Sell Your House – A Complete Guide
Should I sell my house now? FAQs
Is now a good time to sell my house now, or should I wait?
Deciding whether to sell your house now or wait until next year depends on a number of factors, including, but not limited to:
- If your local real estate market favors sellers, meaning there's low housing supply and buyers are entering into bidding wars and offering to pay cash for your home.
- If you can secure a high sales price now or if you'll make more money by waiting until next year.
- Your financial situation, including if you'll earn enough money to pay down your mortgage and cover seller closing costs.
- Personal reasons or life circumstances, like if you're retiring, downsizing, or you need to move for a new job.
Our guide breaks down some of the top reasons to sell now and the top reasons to wait until next year, so you can make a decision that’s right for you.
How long should you wait to re-sell your house?
If you’ve lived in your house for more than two years, it's likely you have more home equity to cash in. Owning a home for more than 2 years also means you'll likely avoid paying capital gains taxes.
Re-selling your house in less than two years increases the likelihood you’ll owe taxes. You may even need to bring money to the closing table, if you haven't built up significant equity in your home.
Will housing prices fall in 2023?
Some analysts believe housing prices will fall in 2023 as the Federal Reserve raises interest rates. But the real estate market is always shifting, so it's tough to determine where things will head in 2023. Real estate is also highly local, and some markets will outperform others. Our article covers factors that impact home prices so you can better understand what drives the market.
Related links
How to Find a Realtor – Expert Secrets. What’s the best way to find a high-quality agent? We’ve compared all of your options. Here’s a complete guide to getting started on your realtor search.
What to Know About Selling a House After 1 Year or Less. If you’re forced to sell quickly after buying a house, you may or may not have to bring money to the closing table. Here’s what you need to know, and tips on saving money on your home sale.
How to Sell Your House – The Ultimate Guide. A complete guide to selling a house in 12 steps, to educate you on the home sale process and prepare you for your big sale.
How to Sell a House Fast Without Losing Money. Our guide breaks down the easiest ways to speed up the home-selling process, without sacrificing any of your valuable home equity.
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