Is there a "right time" to sell?
If you're thinking about selling your property, you're likely hoping it will be sooner rather than later. But when is the right time to sell?
The experts at Seeff advise:
The ideal rule for property is to buy low and sell high – buy for the lowest price and sell at the highest price. This is also often referred to as timing the market. This means that you have to ‘watch’ the market to see how it performs so that you get in to buy when it is a buyer’s market and sell when it is a seller’s market.
In a buyer’s market, the buyer is likely to obtain the lowest price while in a seller’s market, the seller is likely to achieve the highest price. That is an ideal that seldom plays out because you can only really look back with certainty to identify a particular period as a good phase for buyers or sellers or having been a good time to buy or sell.
The property market follows cycles and ebbs up and down, generally tracking the economic cycle of the country. The market is also not homogeneous and each region, city and suburb differs. Where one area can be experiencing a decline in market conditions, another may still be in balance/equilibrium and yet another might still be experiencing boom conditions.
There is therefore no real right time to sell. The right time to sell is unique to each seller and depends on the seller’s reasons and motives for selling. Thus, regardless of the state of the property market and economy, sellers can continue achieving sales and even good prices.
If profit is your main motive, then you will want to sell when the prices are high and buyers aplenty. If on the other hand, your financial position has improved and you want to upgrade to a better neighbourhood or house, then any time is the right time to do so. Remember, you are selling and buying again. Holding out for a higher price might mean that you too will have to pay a higher price for your next property.
Other reasons for selling could include moving closer to work. Again, if you hold out too long, you will also have to pay more as areas closer to main arterials or those that offer reduced travelling time, tend to sell for higher prices, regardless of the market cycle, simply because of scarcity.
If you need to sell for whatever reason and find yourself in a market cycle that is on a downward curve, then you need to think carefully about turning down an offer that might be below your asking price. While by no means advocating selling your house below its value, that offer might be the best, or perhaps even the only offer, that you are likely to see. Again, the seller’s reasons for selling will be the determining factor.
While there is no best time to sell, there are certain mini-cycles that come into play. Again, these tend to be linked to specific times rather than the economy per se. During the colder months, visitor numbers to show houses might drop. When the spring and summer months arrive and the gardens look better and it is nice and sunny, buyers are more likely to go show house hunting.
School and public holiday periods also affect show house attendance. Compare Johannesburg/Pretoria and Cape Town for example. Over the December holidays, Johannesburg/ Pretoria empties out as everybody heads to the coast for their summer holidays.
Cape Town on the other hand becomes a high season tourist city and it along with many coastal towns see more interest in properties as people start looking at possibly investing in a holiday house, or perhaps even a permanent move, as has been the case over the last few years.
As you can see, regardless of the state of the economy and property market, it is always the right time to sell, prices may just need to adjust. Be sure to consult with a local area expert to get the right market information for your suburb and area.