June 2017   Volume 43, Number 6      


How Sellers Can Avoid the Downsides of Hot Real Estate Markets

There are many benefits to a hot sellers’ market, where there are few listings but lots of buyers, including:

  • Less “keep the house perfect” strain on sellers and their families.
  • Less cost and effort to improve the condition of the property to make it “sales-ready.”
  • Significantly higher sales price than listing price.

Hot markets don’t stay hot for long though. If there’s an urge to sell, it should be done as soon as possible to get the best return on investment.

But getting the best return isn’t the only consideration. Sellers need to think about what their next move will be after they sell. Here are some things to consider:

  • If the plan is to buy again in the same neighborhood, market research is essential. The higher price obtained selling an existing home means there will also be a higher price paid purchasing another home if it’s in the same neighborhood. It’s possible for sellers to spend the majority of their real estate profit buying a home that is smaller or has fewer amenities than the home they sold.
  • Purchasing at peak market might not be the wisest strategy. Real estate values often increase rapidly. However, buying into a hot market can force someone to buy a home that requires renovations.
  • Consider renting until the market cools down. In a hot market, it may be better to rent until the next market downturn. The downside is that hot real estate markets also mean higher rental rates. So it’s important to consider how long someone is willing to live in rental housing before buying another home to live.
  • Schools vary. Is the temporary rental accommodation or next buy within the catchment area of current or preferred schools?

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In this issue:

Virtual Reality Shakes Up Real Estate

All-cash Chinese Buyers Disappearing From U.S. Real Estate Markets

Consumer Confidence Falls after Record High

Immigrant Households Impact Success of Real Estate Market

Multifamily Construction Loans Are Getting Harder for Developers to Find

Survey NAR Survey Finds Increase in Consumer Confidence in the Midwest and Rural Areas

Purchases of Vacation Homes Declined for Second Straight Year in 2016

Rising Home Prices Drive Up Homeowner Debt

The 10 States Investing the Most in Commercial Real Estate

How Sellers Can Avoid the Downsides of Hot Real Estate Markets


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