Time for Your Home to Pay You?
By Gary Silverman, CFP®
If you’ve been following this column for a while, you may remember that two years ago I moved from my home of over 26 years to the retirement community of Rolling Meadows. I’ve never regretted the move. I do, however, regret the timing—but not for the reason you might think.
What I failed to predict was the pandemic. Had I waited until now for the move, my house would have netted an extra 15-25% more than what I sold it for. But how was I to know there was going to be a pandemic a year after my move and how was I to know that real estate prices would soar as a result?
I asked the owner of Advantage Real Estate, Dee Ann Martin about what’s going on. As with most things, there are many factors in play. Interest rates are low; people are moving to Texas, and Wichita Falls has a low cost of living—including housing. “It comes down to supply and demand…we have less than one month’s inventory available.”
Carla Rogers of Hirschi Realtors gave me some of the current statistics: According to the Wichita Falls Association of Realtors MLS, the 2020 average residential sales price in WF rose 10 % over the last year. The last quarter’s sales were up 14% compared to a year ago and in April, 80% of the homes that were listed at a sales price of $100,000 to $300,000 sold at or above the asking price.
If this is a great time for you to sell your house, it’s also a great time for someone to sell you theirs. I asked Dee Ann Martin about this. “Yes, it is a great time to sell a home, as long as you are not trying to purchase a new one,” she said, “If a home is in a good location, well maintained, and priced reasonably it will probably receive multiple offers in 24 hours after going on the market.”
You could gamble a bit and sell yours, rent until prices come down, and then buy. But who wants to move twice—and what if prices stay elevated? Timing real estate is like trying to time the stock market, and you know what I think about that. Still, if prices are up and you have options, I think it might be time to shift some future plans forward.
For instance, what if your next move is like the one I did…from ownership to a permanent or extended rental situation? Again, from the real estate agent that sold my home, Dee Ann Martin: “If a person is considering sizing down or desiring to move into a retirement center or a condo the timing is great! This is also true if they are wanting to live with children or next door in a mother/father-in-law cottage.” Carla Rogers agrees: “If you are considering moving to a retirement community or moving in with a loved one, now would be the time to sell and maximize your return on investment.”
My timing may not have ended up being perfect. But it might be the perfect timing for you.. See y’all next week!
Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.