Sell now or wait?

The recent upward shift in home prices is causing some ambivalent homeowners to seriously consider selling. A common dilemma is when to sell. Is the recent uptick in the market a blip or the beginning of a trend? Should you sell this year or next or perhaps even years from now?

After declining every month for nearly three years, the Standard & Poor's/Case-Shiller 10-City Composite Price Index for the U.S. rose 3.6 percent between April and July following a 4.8 percent decline for January to April. This represents a big and sudden change -- probably due to near-record-low interest rates, the $8,000 first-time homebuyer tax credit, and a change in buyer psychology.

However, even though home prices moved in a positive direction, they are still much lower than they were a year ago. One of the key factors affecting increased sales activity is improved affordability. Lower prices and interest rates are motivating buyers to commit to a purchase.

The magnitude of price changes varies from one market to the next. In the San Francisco Bay Area, the median price of existing homes in the summer of 2007 was $665,000, according to MDA DataQuick, a real estate information firm. The median home price for the region in September 2009 was $365,000.

The S&P/Case-Shiller price indexes attempt to measure changes in home values. Median-price fluctuations reflect both a change in home values and changes in character in the market. Half the homes sold during a period sold for more than the median price and half sold for less.

The Mortgage Bankers Association (MBA) recently predicted continued economic growth through 2009 and a fall-off at the beginning of 2010. MBA predicts that sustained growth should resume in the second half of 2010, with fixed-rate mortgages expected to rise next year from the current 5 percent level to 5.6 percent. MBA predicts that national average home prices will bottom out in early 2010, although this will vary with location and price range. ...CONTINUED

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.