5 signs that it's a good time to sell

Why desperate homeowners could find relief this year
By Dian Hymer
Inman News®

Traditionally, most homes have sold during the spring months. In the current volatile housing market, the time of year is not the most reliable predictor of the best time to sell.

Homes certainly show better in spring than they do on a dark and dreary winter day. Lately, however, weather patterns are hard to predict.

The weather has some effect on home sales. It can slow things down if incessant rain keeps sellers from being able to prepare their homes for sale. However, a bigger influence on the housing market is the overall economic situation and its impact on buyers' psyche.

Normally, the home-sale market ramps up in March or April and stays busy until the beginning of July when the market tends to slow down for the summer. The 2011 home sales went counter to this. The market was active at the beginning of the year, but stalled in April. If you waited until spring to sell last year, you would have missed the best selling opportunity of the first half of 2011.

The early slowdown was partially due to the expiration of the homebuyer stimulus package. The homebuyer tax credit program accelerated home purchases creating a mini bubble in 2010 that was followed by a significant slowdown in home sales.

Negative economic news played a big part in the sluggish home sales during most of last year. The stock market was unpredictable, and the earthquake in Japan had repercussions for many industries. Plus, Greece was on the brink of bankruptcy, and the future of the European Union was in doubt.

Bad economic news and massive uncertainty lowers consumer confidence. Buyers need to have jobs, but they also need to feel confident in their future to take on a major purchase like a house.

HOUSE HUNTING TIP: The best time to sell is when consumer confidence is on the upswing; interest rates are low; unemployment is decreasing; the economic news is mild; and there are more buyers in your local market niche than there are sellers. A high-demand, low-inventory market gives sellers an edge.

The Conference Board Consumer Confidence Index fell in March 2012 to 70.2 (1985=100), down from 71.6 in February, when it was up sharply.

Lynn Franco, director of The Conference Board Consumer Research Center, attributed the improvement in consumer confidence in February to less pessimism about current business and employment conditions and more optimism about the short-term outlook for the economy and job prospects despite a rise in gas prices. Franco said the moderate decline seen in March was "due solely to a less favorable short-term outlook."

Interest rates are currently at historic lows and are expected to stay low for the rest of the year. Even with low rates, buyers have had difficulty qualifying due to rigid mortgage approval underwriting.

Capital Economics, an analytics firm, expects the housing crisis to end this year partially due to lenders loosening credit. According to Capital Economics, one indicator of loosening is that banks are now lending 82 percent of loan-to-value (LTV), compared with a low of 74 percent LTV reached in mid-2010. This means qualified buyers need less cash to buy, which should lead to more sales this year, although higher home prices are not expected.

These positive indicators combined with a drop in homes for sale at the end of 2011 and a decrease in unemployment may provide an opportunity for sellers in spring 2012, provided their homes are priced right for the market. A major surprise on the economic front could change the picture.

THE CLOSING: Regardless of the economic indicators, the best time to sell is when the time is right for you.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Apartment Vacancies Decline in U.S. to Lowest Rate Since 2001

By Hui-yong Yu

Apartment vacancies in the U.S. fell to their lowest level since 2001 as home seizures and a growing pool of young adults forming households boosted rental demand, according to Reis Inc. (REIS)

The vacancy rate fell to 4.9 percent in the first quarter from 6.2 percent a year earlier, the New York-based property- research company said in a report today. It was only the third time since Reis began gathering the data 31 years ago that the rate was less than 5 percent.

While low vacancies are helping to boost the performance of apartment properties nationwide, “risks may manifest later in the year” as multifamily developers pick up the pace of construction to take advantage of rising rents, Victor Calanog, head of research and economics at Reis, said in the report. Photographer: Chip Chipman/Bloomberg
.Renters are competing for a tightening supply of units as more homeowners are displaced by foreclosures, stricter mortgage-lending standards block purchases and young people move out on their own. In the three months ended March 31, 7,342 apartments became available, the fewest number of completions since Reis began publishing such data in 1999.

When vacancies drop below 5 percent, “effective rents tend to spike as landlords perceive that tight market conditions allow for greater pricing power,” Reis said in the report.

Effective rents, which take into account such landlord concessions as a free month, climbed almost 1 percent from the previous quarter to an average $1,018, the largest increase since the last recession began, according to Reis.

While low vacancies are helping to boost the performance of apartment properties nationwide, “risks may manifest later in the year” as multifamily developers pick up the pace of construction to take advantage of rising rents, Victor Calanog, head of research and economics at Reis, said in the report.

Reis expects about 70,000 units to open for leasing this year, about double the supply growth in 2011. Next year, the firm forecasts 150,000 to 200,000 new units in the 79 primary markets it tracks.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.