As a homeowner, we bet there’s a pretty good chance you’ve been in awe over the past two years, as the United States has had one of the hottest seller’s markets in real-estate history. Needless to say, a lot of us have. And, like you, we’ve been hitting up those real-estate websites on the regular just to watch our home values keep creeping up. (Side note: How many times do you think you’ve said the word “ZestimateⓇ” the past couple of years? Crazy, huh?) It’s not surprising at all if you’ve been thinking seriously about selling your home or even feel just a little tempted by this crazy housing market.
What are the experts saying about the housing market now? Generally, they agree that this continues to be one of the best times for people to sell their homes, despite consumer concerns about the economy and the Fed raising interest rates higher than earlier in the pandemic. So how would a seller benefit from the market? By cashing in, of course. Real-estate website and data experts Zillow said recently that buyers “remain ready to pounce on any inventory that hits the market” because of fewer homes up for sale. Many buyers are working hard on their plans for how to win a bidding war on a house, and you could be the lucky beneficiary of that effort.
Will the housing market improve in 2022 — or continue to improve, for that matter? While things have remained hot so far this year, there has been some talk about a deceleration. Zillow reported in April, however, that the annual home-value growth continues to set records, which means homes are generally worth more now than they were even last year. For example, Zillow said that the typical U.S. home is now worth $337,560, an increase of 20.6% from 2021. Plus, spring and summer are some of the busiest times for potential home buyers who are out looking in hopes of moving in before fall or winter. So, if a deceleration were to happen, it hasn’t yet.
So the biggest question of all may actually be this: What can I do to win the housing market? And, fortunately, there are several ways to get yourself ready for listing your home and going forward with a full-on sale. They include refinancing to get a better interest rate now or for a future home, cleaning up your own financial house, and doing timely home improvements to possibly increase your home’s value, to name a few. Ready to win in this hot seller’s market? Here are six ways to boost your profits.
1. Refinance your mortgage
You may want to look at refinancing your home to get those mortgage payments lower, so you get more money back in your pocket after the sale. Refinancing was at an all-time high during the first two years of the pandemic when refinancing mortgage rates were at record lows. Interest rates have begun to climb in recent weeks as the Federal Reserve increased the overall interest rate. But rates are still great for those looking to refinance their mortgage and save some money monthly on that loan, which is likely your largest debt payment. Check with your lender or look for a mortgage broker to see how much you could potentially save. Our main advice, though? Go ahead and lock in a no-obligation rate as soon as possible while you’re considering this refinancing move, so you don’t end up with a higher rate later if you choose to proceed.
2. Pay down your mortgage
Want to take your refinance a step further? Consider adding the amount that you’re now saving each month with your lower payment back into your monthly payment. You’ll be paying as much as you were before the refinance — so you won’t be stretched any thinner — but you’ll be paying much more toward the actual principal of the loan. That means when you sell your house, you’ll receive an even larger check from the bank (since you’ve paid more of your mortgage down than you would making regular payments).
Didn’t go the refinance route? No problem! If you have additional funds to pay down your mortgage, you can let your bank set up a payment system where you pay twice a month instead of once a month. Why? Because, at the end of a year, you’ll actually have made 26 payments instead of 24, thereby adding an entire month’s worth of payments to the principal! And our guess is that you won’t even notice the difference in your pocketbook!
3. Fix up your home before listing
It’s always a good idea to look at updating your home if you’re considering selling it. However, getting contractors for major interior or exterior projects may take weeks or even months to set up — many contractors have been busier than ever during the past two years.
Our advice is to do what you can the DIY way if you want to sell ASAP. New paint, pressure washing, and a few spot improvements here and there can go a long way in making your home more attractive to buyers. Many buyers are waiving thorough inspections, and some are more willing to take on minor projects in order to get the home they’re looking for.
If you do want to take on something major before selling — think a new roof, an upgraded kitchen, or a brand new bathroom, for example — those projects are taking a bit longer because of contractor schedules, shipping delays, and product shortages. Getting your renovation ducks in a row makes sense if you want to sell your home in the next 6 to 12 months.
4. Consider who you’re selling to
Think about your home and how you used it. If you’ve lived in a condo, think about why someone would want your specific condo. Maybe you’ve renovated recently or have a primo location close to downtown.
This is especially true for single-family homeowners. There are plenty of growing families who will eagerly look to purchase your larger home right now, as inventories are still relatively low and prices continue to remain steady or even continue to rise in key cities where demand has gone up drastically. But still, a little differentiation will go a long way!
The same goes for opposite situations. And while you’re making your home look perfect for potential buyers? You may also want to store some of your items in a storage container or at a secure PODS Storage Center to help with staging your home and getting a jumpstart on your eventual move.
5. Consider renting and waiting out the market
As we’ve discussed, home prices are at a record high. So, as the old adage goes, it’s a good time to sell high and buy low. Homeowners across the country are thinking about selling their current home, finding a rental to wait for the market to cool down, and then buying another home at a better price and pocketing the difference. Sounds reasonable!
So the selling high part is straightforward enough, and the market is hot enough where the process might not take that long. It’s the buying low part that can get tricky. Rent prices in many parts of the country are surging along with home prices, particularly in the markets that have seen the most growth associated with the pandemic. If you’re considering this option, be sure that you have adequate housing to support your lifestyle before pulling the trigger. You don’t want to be stuck in an apartment that’s too small for you if you find it difficult to find a new home later on.
|Insider Tip: Speaking of rentals, PODS is a great moving option when you’re “playing the housing market” because it allows for a super flexible move. Need to move out of your current home and rent temporarily while you continue the search for your next home? No problem. You can store your PODS moving and storage container in a secure PODS Storage Center for as long as you need — short-term storage or long-term storage. Then (when you’re ready), we’ll deliver it to your new home — wherever it may be.|
6. If you’re ready to downsize, jump on it
Have the kids left home? Ready for a condo down south? Or maybe you just don’t want to clean such a big house anymore (yeah, we get it). Whatever your reasoning, now is the time to downsize if you plan on it.
Similar to Zillow’s findings, the S&P CoreLogic Case-Shiller Price Indices (say that ten times fast) reports that the average American home price increased 19.80% between February 2021 and February 2022. By jumping on this trend, you can maximize your profits when you sell your current home and purchase a smaller one to live in. And those extra dollars? They can be spent decking out your new home with the latest appliances… or taking an exotic vacation across the globe (just saying).
What about a housing bubble?
Here’s one question you may be wondering about when it comes to selling your home soon: How do you hedge against the housing bubble? This makes sense to consider if you’re selling your home and need to buy another one as a replacement. Our advice? If you are going to buy a home, the best way to hedge against a housing bubble is to buy a house that fits your budget, your financial situation, and your family. Buying a house that’s too large for you and dealing with a larger monthly payment than you feel comfortable paying may put you in a bad situation later should the housing market start to decline. After all, when it comes to winning in the housing market, the best moves are always smart ones.
Want to read more about getting the most out of your home in this housing market? Read our in-depth series on selling your home on the PODS Blog.
Karen Dybis is a freelance journalist and a frequent contributor to the PODS Blog. Her work has appeared in Time magazine, U.S. News & World Report, The Detroit News, and more.