My sister would like to sell her home now or 2 years from now. Should she sell now or later?

Asked by Home Owner, San Jose, CA Thu Sep 15, 2011

It seems like there is a consensus that it is the time to buy now, and I am aware that if it's the time to buy, it isn't the time to sell...but would it make a difference to sell now vs 2 years from now?? Any advice would be appreciated!

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19
Attilio Adamo, Agent, Closter, NJ
Tue Sep 27, 2011
It all depends on her situation. Does she have equity in the home. If not and she takes a lost then she will pick up the Gain in the purchase. Best time to buy - buyer's market - low market value-high inventory and low interest rates. This should help you make a decision. By the way the purchase should be longterm or else do not buy. Good Luck.
1 vote
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Sat Sep 24, 2011
Home88 You are right!
It would be a good time to hold if possible.
Your sister has to make up her mind and what she plans to do can be very important as well.
Then again is this a short sale? if so do it now.
If it is a standard sale I would wait.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomesrealestate.com
http://www.socalhomesrealestate.com
California Department of Real Estate Broker License # 01312992
1 vote
Sam Shueh, , San Jose, CA
Sat Sep 24, 2011
There is an excellent article in last Sunday real estate section of SJ Hg News. There is no bad or good time to sell. Few professionals are predicting a surge in prices anytime soon. When you need to move on and don't want the hassle you do what you need to do. In a nutshell the price is not going to move based on predictions.
Sell or not to sell is the question.
Web Reference:  http://sam.shueh.net/
1 vote
Steven Ornel…, Agent, Fremont, CA
Sat Sep 17, 2011
Home88:

"So, the US as a whole has not yet reached the "bottom." However, what about the Bay Area?"

When it comes to making a decision on the sale of a single property looking at the Bay Area would not provide a useful answer. The geographic definition of the "Bay Area" will vary from person to person. For example, why would you want to look at Berkeley if the property is in Morgan Hill/Gilroy?


"The location of interest is the Morgan Hill/Gilroy area...and how much home prices have fallen in the past few years is quite obvious... but if they fall even more, wouldn't this mean that even more homes will go through foreclosure?"

Morgan Hill and Gilroy are not exactly the same as far as town feel and local amenities. Any Realtor would want to know the exact property info. Yes, all other things being equal (i.e. unemployment rate does not improve); I do believe further price declines will lead to more distressed property supply.


"Also, do you think there is a large REO shadow inventory left in this specific area?”

The Realtor® your sister “hires” should answer this question based on the representative geographic area chosen to research.


“For example, homes that were previously over $1M at Eagle Ridge are now going for under $700K. Could these homes fall even further?"

Answered above.


“She wants to sell her house so that she can move to a larger home that were not affordable during the housing bubble... do you still advise that it's smarter to wait?”

The only advice I am providing is to fully research the economic/housing trend(s) for the representative geographic area your sister’s home is in coupled with professional tax/financial planning input to make an informed decision regarding this question.

Researching the area trend(s) is a “no brainer”; however, you really do want to also include tax/financial planning! Case in point: will your sister be 55 when she sells? If so, She may be able to take advantage of Props 60, 90, or 110 allowing her to transfer her tax base (if advantageous) on a new home that is purchased or built! You can read more details here: http://docs.Steven-Anthony.com/Prop60-90-110.pdf


If you, and your sister, would like to talk in more detail or need a referral for a tax/financial planner contact me via email.

Best, Steve
1 vote
Steven Ornel…, Agent, Fremont, CA
Fri Sep 16, 2011
Home88:

First, let’s define "we" as the USA in general and alternately your Sister's specific area.

From a US perspective, I do not think we have reached the bottom of the recovery curve. Two supporting data points:

1) The FHFA national home-price index has been running around 191 then it started on a 10 point decline that bottomed in March/April this year and as of June now sits at 183; however, many believe the 183 figure is artificially higher due foreclosures that were not placed on the market (REO Shadow Inventory) due to lawsuits and procedural blockages.

2) Core Logic recently reported that as of June 27.5 percent of all mortgaged homes had negative or near-negative equity (13.3 million households). Whether it be via a true hardship or "strategic default" the possibility of 13.3M more foreclosures does not foretell a rain-free path to recovery. Out of the entire US, CA has the highest number of "Negative Equity Mortgages" at a total of 2,064,850 (Florida is 2nd at 1,970,756).


From your Sister's perspective, well, I really cannot comment since I have not researched your sister's specific area; however, given the 10.4% unemployment rate for the area (which measures the rate of unemployment and not the actual number without a job) I do not think we have reached the bottom of the recovery curve. Therefore, your Sister MAY benefit by selling now and standing on the sidelines and then jumping into another property better suited to her needs, subject to the local area research I have suggested along with guidance from a tax advisor/financial planner.

Best, Steve
1 vote
Steven Ornel…, Agent, Fremont, CA
Fri Sep 16, 2011
Home88:

"My sister would like to sell her home now or 2 years from now. Should she sell now or later?"

I agree with Terri, your sister should talk with a tax advisor and/or financial planner so she has a clear picture of the proposed transaction. Knowing that you want to sell is an easy decision, figuring out if it’s a good financial move may require professional help and planning.


"It seems like there is a consensus that it is the time to buy now, and I am aware that if it's the time to buy, it isn't the time to sell...but would it make a difference to sell now vs. 2 years from now??"

Personally, I believe the US is in year 5 or 6 of a 10-year correction cycle. Your sister's specific area may or may not be in the same recovery cycle. For this reason you/she should make sure you are listening to the consensus of your specific area backed by some local research! Look for quantitative information about loans currently in default status, for-sale foreclosure inventory and foreclosure shadow inventory specific to your area. Also keep an eye on US Gov legislation which seemingly is making it harder to buy a home on a monthly basis (as of this post, most recently, allowing current max loan limits to expire on 10/1). Most importantly, identify the strength and trend of jobs growth in your area as it's very tough to have a housing recovery without steady jobs growth. (i.e. the San Jose-Sunnyvale-Santa Clara, CA Metropolitan Statistical Area currently has a 10.4% unemployment rate).

Depending on your sister’s situation a “good time to buy” may also be a “good time to sell”, unless you believe we are at the very bottom of the recovery curve (which, if you perform the research above you may find evidence to the contrary).

Getting off a sinking equity ship and on to a conservative row boat may be a good strategy at this time – but make this decision with the help of professionals.

Best, Steve
1 vote
Sally Blaze, Agent, Pleasanton, CA
Thu Sep 15, 2011
What does your sister want to do? And if she sells now, is she going to buy a new place or rent? Or is she wanting to retire and move out of the area? Interest rates are amazing right now...helps buyers afford more home (or any home), and this may also help your sister if she will be financing the purchase of her next home. But, these are assumptions. I would suggest your sister discuss her situation with a tax advisor first, then make a list of pros and cons of moving versus staying put for a while. She should also talk with a real estate professional about her particular market area and home values versus the market area and values of where she will be moving to.

Good luck to your sister...and congratulations on thinking about the options, and having options! So many people in today's market are moving based on need.

Sally Blaze
Alain Pinel Realtors
925-998-1284
sblaze@apr.com
Web Reference:  http://www.apr.com/sblaze
1 vote
Terri Vellios, Agent, Campbell, CA
Thu Sep 15, 2011
There are too many questions we professionals would need answers to regarding your sisters situation, goals, current value, tax situation, etc.

I advise that she first talk with her trusted tax adviser regarding any gains or loss. Then talk with a trusted real estate professional. With that information she should be able to make an educated decision for today. Whether it be to sell now or hold later. There is not cost for the real estate advice, and her tax adviser may be a nominal fee.

All the best to your sister.
Web Reference:  http://www.terrivellios.com
1 vote
Linda Urbick, Agent, Blackhawk, SD
Thu Sep 15, 2011
This is a decision only your sister can make depending on her circumstances. There is no way to tell what the market will be like in 2 years. If she can afford to sell and buy now, then you are right --now is the time to buy a house.
Web Reference:  http://www.lindaurbick.com
1 vote
CJ Brasiel, Agent, San Jose, CA
Thu Sep 15, 2011
Home88

Great question. I think the answer would be in the details of your sister's specific situation, including the value of the home, the local market where the house is located, and most importantly; your sister' goals. I am not sure a proper answer can be given here on the forum as it would be speculative and with minimum facts.

I would be happy to consult with you and your sister on the matter with no obligation to sell or use me as your agent.

CJ
Web Reference:  http://www.TalkToCJ.com
1 vote
James Mauldw…, Agent, Saratoga, CA
Thu Sep 15, 2011
Now is a great time to buy. Rates are at an all time low and money is redily available to buyers. But the main question is do you have to sell? If you do not have to sell and have no where to go, just stay.

Here are 4 questions for you to answer before you consider selling:

Why are you selling?
When do you have to sell?
Where are you moving to?
What if the home does not sell in the next three months?

If you can answer these questions with a strong forward moving answer. You should sell now. If not, keep the house.

JIm Mauldwin
Intero Real Estate Services
408-863-3020
Web Reference:  http://www.jimmauldwin.com
1 vote
Lauren Schen…, Agent, Folsom, CA
Thu Sep 15, 2011
Interest rates often weigh heavier than home values when it comes to buying a home. If she's buying, now is the time to get in a home. Interest rates are as low as they've been in decades, and we don't know where they'll be in two years - they could very well go up. You're buying a monthly mortgage payment, and the interest rate is key. I honestly can't see home values skyrocketing in the next two years, so if she can find the right place, and can sell her home without a short sale/foreclosure, it is a great time to get in a home and stay in it for a minimum of 5 years or more. Make sure she's ready for a 5 year + purchase.

Please let me know if you need some referrals to good agents in San Jose - I have a few I would highly recommend to your sister. Good luck!
1 vote
Mario Pinedo,…, Agent, Cupertino, CA
Thu Sep 15, 2011
That really depends. For most parts of San Jose - prices should be about the same. It may differ by a few percentage points in the next couple years. Some neighborhoods will do better than others though.
But, this is an answer if price is question.
If there are other reasons to hold on or to sell now, please let me know.
I think for us to get into a seller's market - when sellers get the best price and buyers are over-exuberant - we have to wait to get to the end of the next cycle which may be 5-8 years from now, or even longer.
Something to consider is if your sister will buy after selling in San Jose. Perhaps she will do better buying in a more depressed marketplace and then that might influence her urgency to sell.
1 vote
Scott Godzyk, Agent, Manchester, NH
Thu Sep 15, 2011
You would think you would be selling for less now than in 2 years but will also be able to buy now less than you will in 2 years, the question is can she find what she loves now and get it under market value so the savings far outweighs the amount sheis selling for. Good luck
Web Reference:  http://www.ScottSellsNH.com
1 vote
Andrew Queza…, , Covina, CA
Wed Sep 28, 2011
I'm a mortgage lender but have a family looking to relocate to the San Jose/Fremont area.. Can you post more details about the property?

Andrew
626.825.6565
Web Reference:  http://www.AQHomeLoan.com
0 votes
Steven Ornel…, Agent, Fremont, CA
Mon Sep 19, 2011
Home88:

If your sister is going to develop a plan for selling/moving it would be better to get ahead of this future supply!

"California foreclosures set to surge"
http://www.housingwire.com/2011/09/19/california-foreclosure…

Best, Steve
0 votes
Home Owner, Home Owner, San Jose, CA
Fri Sep 16, 2011
So, the US as a whole has not yet reached the "bottom." However, what about the Bay Area? The location of interest is the Morgan Hill/Gilroy area...and how much home prices have fallen in the past few years is quite obvious... but if they fall even more, wouldn't this mean that even more homes will go through foreclosure? Also, do you think there is a large REO shadow inventory left in this specific area? For example, homes that were previously over $1M at Eagle Ridge are now going for under $700K. Could these homes fall even further? She wants to sell her house so that she can move to a larger home that were not affordable during the housing bubble... do you still advise that it's smarter to wait?

Thanks for such detailed answers!
0 votes
Home Owner, Home Owner, San Jose, CA
Fri Sep 16, 2011
"Depending on your sister’s situation a “good time to buy” may also be a “good time to sell”, unless you believe we are at the very bottom of the recovery curve (which, if you perform the research above you may find evidence to the contrary)"
are you saying we are not at the bottom but still on the downward spiral...or upward swing??
Thanks for the input everyone!
0 votes
Michael Pham, , San Jose, CA
Thu Sep 15, 2011
It's based on what your sister's goals are. If she doesn't need or want to move for a next 2 years it might make sense to wait for the housing industry might recover and prices to appreciate. Two years from now no one know when prices will be back up to either where they were or just plain going back up.
However, if she wish to move within the next 12-18 months, it is probably better to sell sooner rather than later.
Foreclosures and short sales on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.

Michael Pham
Coldwell Banker Platinum Group
San Jose
408-499-6177
mpham@cbplatinum.com
Web Reference:  http://www.cbplatinum.com
0 votes
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