Should I sell my house now or wait?

Housing market for Kalamazoo

There is no doubt that 2015 has been a great year for real estate! There has already been $545.79 million in closed residential sales. That is more than all of 2011 and almost as much as all of 2012!

The average sales price in the Greater Kalamazoo market one year ago was $154,503. Despite a slight dip in the average sales price in the month of August, the average sales price for the 12 months ending August 2015 was $161,927. That is still a 4.81% increase in year over year prices.

Kalamazoo’s appreciation is slightly above the state average of 3.5%. We, as a state and city are dragging a little behind the national average of 6.5%

Should I sell my house now or wait?

This is a question a majority of people have. Let’s take a look at a couple of factors before answering that question.

Remember that a rising tide raises all ships. If the plan is to move into a higher priced house, what might be gained by waiting for appreciation, will be more then lost by the purchase. This effect can be compounded if moving out of state. For example, Texas appreciation is at a rate to 2 to 1 in comparison to ours in Michigan. Even if your plan is to move into an equivalently valued home, you would lose one year’s worth of appreciation in six months.

We must factor in the effect that interest rates have on home affordability.

For every point interest rates increase, 10% of purchasing power is lost (shown in the graph to the left).

How interest rates affect monthly payments in the past

The projections of interest rates

After looking at appreciation and interest rates which are the two biggest factors that affect home affordability.

I can honestly say selling sooner then later would be the best idea. You, of course, are the only one that knows when it really is the right time to buy or sell your home. The numbers simply support the sooner the better.

Thanks for reading.