To Sell, or Not To Sell, That Is The Question...

Throughout Louisiana homeowners are asking themselves if they should sell their home or if it’s too late.

Did they miss their opportunity to cash in on their equity? Did they miss out on one of the greatest accelerations of personal wealth in residential real estate since 2008? In short, yes. And no. I’ll elaborate.

In 2021, which was the peak of the real estate market, residential real estate was in a massive demand because of several factors. Low interest rates, a lack of inventory and a flood of cash buyers who tapped into their 401k & IRAs from the recent surge in the stock market.

In 2022 that demand has subsided, somewhat significantly in comparison to 2021 demand. There’s fewer bidding wars, longer days on the market for listings, less inventory, higher interest rates and elevated construction costs.

These changes are causing buyers to reevaluate their motivation to buy a home and rightly so. They are trying to decide if they should wait for the real estate market to cool and prices to drop while also being fearful of rising interest rates and construction costs which have no sign of coming down anytime soon.

Depending on the peak and decline of inflation we’ll likely see interest rates go higher before they go lower. Referencing the 30 year mortgage interest rate rise to combat inflation throughout the 1970s and 1980s interests elevated to 18% from 6% back down to 6% and did so throughout a 20 year period.

So one might say that those hoping for interest rates to decline within a matter of months are ill-informed of just how pressing this issue is.

All of this leads us back to our initial question of to sell, or not to sell. Here’s my advice and it’s based upon an individual situation.

• If you need to sell a house now is just a good a time as any. If your property is in good condition and you price it correctly it will sell within 30-45 days if not sooner.

• If you don’t need to sell and you overprice your property it will sit longer on the market and you’ll eventually have to drop your price, this is because buyers are tighter with their money than they were in 2021. (Remember, lower interest rates and increased demand)

• If you want to buy a house just know you will be paying top dollar and will likely enjoy some appreciation in equity before the market peaks out and begins to decline. This is especially important for those considering relocation within 2-3 years. You’ll likely buy now and sell for the same price if not slightly higher in the future do to the limited demand and peaked out prices.

• If you need to buy a property I’d recommend you do so sooner rather than later. There’s no end in sight for the market to completely pull pack and you’ll likely experience higher house prices along with higher interest rates.

This is truly a confusing time for those considering buying or selling a house but it’s only as difficult as you make it. Instead of asking others what you should do, ask yourself what your goals are.

Sit down and plan out your life so that your purchase or sell is reflective of your goals with a clear timeline and action plan based around it.

I hope this has been insightful and helpful in deciding if you should buy or sell a house in 2022.