Home Prices Are Slipping. Should You Sell Before Property Values Plunge Even More?

The red-hot housing market sellers enjoyed in 2021 is no longer today's reality. Rising mortgage rates have had an impact on buyer demand. And while people are definitely still looking to buy, we're not seeing the same persistent bidding wars we did a couple of years ago.

That said, home sales and prices have been sliding. In April of 2023, existing home sales were down about 23% from April of 2022, according to the National Association of Realtors (NAR). And that same month, home prices were down 1.7% from a year prior.

Now a 1.7% dip in home prices is by no means terrible, especially given how elevated property values were in the spring of 2022. But still, sellers should recognize that while the real estate market still gives them an edge over buyers, that edge could wane over time. And so if you're someone who's serious about selling a home, you may want to act fairly quickly.

It's still a good time to sell

The reason it's still a seller's market boils down to one factor -- inventory, or a lack thereof. As of the end of April, there was only a 2.9-month supply of available homes on the U.S. real estate market, according to the NAR. That's well below the four- to six-month supply of homes it commonly takes to even out the housing market and meet buyer demand in full.

Even though it's gotten more expensive to sign a mortgage loan due to rising rates, the reality is that there are still way more buyers out there than there are available homes. For that reason alone, you're likely to end up with a decent sale price on your property in the near term -- assuming it's in good shape and you price it right. But the longer you wait to list your home, the more you risk ending up with a lower sale price.

We don't know when housing inventory will pick up to a notable degree, but if inventory levels rise, sellers will start to lose their edge. And also, there's the potential for a recession to think about.

If economic conditions worsen later on this year, it could drive more buyers out of the market. That reduction in demand could, in turn, lead to lower home sale prices. So if you know for sure that selling your home is something you want to do, you may want to list it this summer.

It's also worth noting that if your home is located in a neighborhood that appeals to families, you may be better off listing it during the summer specifically, before the school year resumes. Families looking to buy a home may prefer to do so in July so they can potentially close and move in August, before school is back in full swing.

The right agent could help

In 2021, when buyer demand was truly intense, many homeowners opted to sell their properties themselves to save on real estate agent fees. But while it's still a seller's market, it's a very different environment than it was in 2021. And so hiring a real estate agent to sell your home could be a smart bet, even if it means losing some money to a commission you'll have to pay.

A real estate agent can help price your home strategically and market it to buyers. An agent can also help manage the negotiation process in the event that you end up in the fortunate position of getting to entertain multiple offers. So if you're serious about selling your home, start contacting real estate agents soon so you can ask the right questions and choose the right person for the job.