Best time of year to sell? Should I renovate?

[north park girl]

It’s been a few years since I moved out of San Diego, but I kept my house there and have been renting it out. Several factors a point towards 2015 being the year to sell my house that I bought in early 2009, the dark ages of the housing crash: new job, 2-out-of-5 year rule, tenants moving out.

I wanted to poll the group here on when the best time to sell is, and whether I should renovate beforehand.

The house is an old craftsman in North Park–great bones, good size, very livable but needs some cosmetic upgrades. Timing wise, I wouldn’t be able to sell before June. However, if I renovate the outdated bathrooms and possibly kitchen (nothing structural, I’d keep everything where it is, but would otherwise be a top to bottom refresh), that would push it out a few weeks or months. Would it be worth it if it meant missing the summer selling season? Is there much of a different selling in August vs. June? Is there any seller/pricing advantage of selling other times of the year, when supply is lower?

[livinincali]

Usually spring is the best time to sell. List it the day after the super bowl at a realistic price and get a Realtor that can handle a bidding war. I suppose you could wait and see if a spring frenzy starts and pushes prices up but you do run the risk of that not happening and being late to the party if you list it in May/June.

[UCGal]

[quote=livinincali]Usually spring is the best time to sell. List it the day after the super bowl at a realistic price and get a Realtor that can handle a bidding war. I suppose you could wait and see if a spring frenzy starts and pushes prices up but you do run the risk of that not happening and being late to the party if you list it in May/June.[/quote]

I assume you have tenants until June, and that’s why the delay on the construction and listing.

Ideal time to sell, and reality – don’t always match up. Hopefully one of the realtors will chime in with professional advice.

[FlyerInHi]

If you don’t need the money keep it.

As far a I know, North Park is in great demand with renters. I think that prices will keep going up, even if slowly.

I don’t see house price declines in San Diego on the horizon.. not yet.

[sdsurfer]

It would depend on what kind of shape the property is in of course, but personally I’d give it a shot listing it as soon as the tenant is out with an X dollar credit (probably less than I intend to spend on the remodel) towards the updates with a full price offer….maybe consider paint and carpet if it’s really bad. That way you get it on the market when more people are out looking (summer) from a demand standpoint. Spring is best, but Summer is good too though. A lot of people will look in the spring and summer (especially if they have kids in school) and if they do not find what they want they will give it another shot next year at the same time. Not always, but a lot of the time. One consideration is that some people have vision and their own particular style so they would appreciate the credit, but many other people do not have vision and you need to do it for them to see the potential.

You could gauge the activity with your Realtor and if it’s not in escrow in the first couple weeks to a month possibly reconsider and remodel the property at that time to get it sold.

I’ve always thought that Spring and Summer it’s best to be a seller and Fall-Winter it’s better to be a buyer from a macro perspective, but you would also want to have a closer look at your local inventory too at that time. You could list in the fall and be the only home available similar to yours in the area at your price point and that tends to be good too. Just find a Realtor that is willing to ride it out with you and has a bit of flexibility to work with you on your options a bit and what is best for you.

FYI- I am licensed, but I go to piggington for knowledge, feedback and to learn from others not to generate business. I work at a tech company these days. I just keep my license to help my wife out from time to time and because I enjoy the investment side of things. I’m sure you know 1000 realtors anyways as most people do.

I hope it plays out well for you and I’m thinking it will! Good luck.

[brg654]

[quote=FlyerInHi]
I don’t see house price declines in San Diego on the horizon.. not yet.[/quote]

while i agree with your sentiments about north park, i can’t agree with this statement. this morning’s case shiller data now show 5 straight months of price declines for san diego, although we are only off about 1% total from the march peak.

[north park girl]

Thanks all for the comments so far.

I’ve thought for a while about whether to sell or keep renting it. It’s marginally cash flow positive right now. North Park has changed (gentrified) quite a bit from when I first moved there, and it’s a perfect rental property for the neighborhood. But being a remote landlord for a few years means a lot of deferred maintenance is overdue (eating into any earnings). My new job offers a generous relocation package including paying closing costs. That, plus losing my capital gains exemption next year means leaving ~$50K on the table. Would also be nice to have the cash in case I decide to enter the crazy Bay Area housing market.

FWIW, I played around with Case Schiller San Diego numbers, comparing each month’s index to the two year moving average (one year before and one year after) for 2004-2013 (basically, I tried to determine what the seasonal adjustment is). Not the most rigorous analysis, but these numbers indicate July-August-September as the best months to close price wise. So that would seem to place May-July as the best times to put it on the market.

Jan -1.6%
Feb -1.9%
Mar -1.7%
Apr -0.9%
May -0.1%
Jun 0.8%
Jul 1.5%
Aug 1.6%
Sep 1.5%
Oct 0.6%
Nov 0.1%
Dec -0.7%

Spring seems to be below average for sales price, so I’m wondering why people are saying to sell in the spring? Any data to show why that would be better that I’m missing?

I do like the idea of putting it on the market right away and testing the waters (with a credit for renovations). I do have a specific number in mind, so if I can’t get it, I may go ahead with the remodel.

[poorgradstudent]

[quote=sdsurfer] One consideration is that some people have vision and their own particular style so they would appreciate the credit, but many other people do not have vision and you need to do it for them to see the potential.

[/quote]

We definitely had our own vision when we were looking. There were a few properties where it would note “brand new carpets and paint” and our response was “but they’re ugly!” and we’d pass; as a buyer you feel like you’re paying for it, especially if it’s done “wrong”. Paint is less of a big deal, but a lot of people seem to want to go too dark on carpets.

We also definitely skipped homes where there had been a quick kitchen/bath remodel. You can kinda tell when someone updates the kitchen as their “home” vs. trying to sell it. Again, it was frustrating to walk into a home and see that it had been remodeled sloppily.

Of course a lot of people want “turnkey” homes, and we did see quite a few places that were redone very nicely. Of course those places often wanted to get compensated for the money they sunk into it, which put those places out of our preferred price range.

[livinincali]

[quote=north park girl]
FWIW, I played around with Case Schiller San Diego numbers, comparing each month’s index to the two year moving average (one year before and one year after) for 2004-2013 (basically, I tried to determine what the seasonal adjustment is). Not the most rigorous analysis, but these numbers indicate July-August-September as the best months to close price wise. So that would seem to place May-July as the best times to put it on the market.

Jan -1.6%
Feb -1.9%
Mar -1.7%
Apr -0.9%
May -0.1%
Jun 0.8%
Jul 1.5%
Aug 1.6%
Sep 1.5%
Oct 0.6%
Nov 0.1%
Dec -0.7%

Spring seems to be below average for sales price, so I’m wondering why people are saying to sell in the spring? Any data to show why that would be better that I’m missing?

I do like the idea of putting it on the market right away and testing the waters (with a credit for renovations). I do have a specific number in mind, so if I can’t get it, I may go ahead with the remodel.[/quote]

Case-Shiller is a 3 month rolling average of the previous 3 months. I.e. 1.5% in July represents April/May/June average. 1.6% Aug = May/June/July average.

In addition it looks at closing prices so the homes were likely listed somewhere between 30-60 days before the closing price was reported. So the July number is looking at stuff listed in Feb/March/April/May.

[scaredyclassic]

[quote=poorgradstudent][quote=sdsurfer] One consideration is that some people have vision and their own particular style so they would appreciate the credit, but many other people do not have vision and you need to do it for them to see the potential.

[/quote]

We definitely had our own vision when we were looking. There were a few properties where it would note “brand new carpets and paint” and our response was “but they’re ugly!” and we’d pass; as a buyer you feel like you’re paying for it, especially if it’s done “wrong”. Paint is less of a big deal, but a lot of people seem to want to go too dark on carpets.

We also definitely skipped homes where there had been a quick kitchen/bath remodel. You can kinda tell when someone updates the kitchen as their “home” vs. trying to sell it. Again, it was frustrating to walk into a home and see that it had been remodeled sloppily.

Of course a lot of people want “turnkey” homes, and we did see quite a few places that were redone very nicely. Of course those places often wanted to get compensated for the money they sunk into it, which put those places out of our preferred price range.[/quote]

i’m plannign to spend a lot of money on some wood floors for part of the house that has icky carpet. is that considered a loser or does the floor retain some value? i want really expensive salvaged barn wood floors from old barns where happy animals lived productive lives.

[north park girl]

[quote=livinincali][quote=north park girl]
FWIW, I played around with Case Schiller San Diego numbers, comparing each month’s index to the two year moving average (one year before and one year after) for 2004-2013 (basically, I tried to determine what the seasonal adjustment is). Not the most rigorous analysis, but these numbers indicate July-August-September as the best months to close price wise. So that would seem to place May-July as the best times to put it on the market.

Jan -1.6%
Feb -1.9%
Mar -1.7%
Apr -0.9%
May -0.1%
Jun 0.8%
Jul 1.5%
Aug 1.6%
Sep 1.5%
Oct 0.6%
Nov 0.1%
Dec -0.7%

Spring seems to be below average for sales price, so I’m wondering why people are saying to sell in the spring? Any data to show why that would be better that I’m missing?

I do like the idea of putting it on the market right away and testing the waters (with a credit for renovations). I do have a specific number in mind, so if I can’t get it, I may go ahead with the remodel.[/quote]

Case-Shiller is a 3 month rolling average of the previous 3 months. I.e. 1.5% in July represents April/May/June average. 1.6% Aug = May/June/July average.

In addition it looks at closing prices so the homes were likely listed somewhere between 30-60 days before the closing price was reported. So the July number is looking at stuff listed in Feb/March/April/May.[/quote]

Good to know, thanks for the clarification.

[poorgradstudent]

[quote=scaredyclassic]
i’m plannign to spend a lot of money on some wood floors for part of the house that has icky carpet. is that considered a loser or does the floor retain some value? i want really expensive salvaged barn wood floors from old barns where happy animals lived productive lives.[/quote]

I have an irrational love of wood floors, so I’m not objective there.

[sdsurfer]

[quote=poorgradstudent][quote=sdsurfer] One consideration is that some people have vision and their own particular style so they would appreciate the credit, but many other people do not have vision and you need to do it for them to see the potential.

[/quote]

We definitely had our own vision when we were looking. There were a few properties where it would note “brand new carpets and paint” and our response was “but they’re ugly!” and we’d pass; as a buyer you feel like you’re paying for it, especially if it’s done “wrong”. Paint is less of a big deal, but a lot of people seem to want to go too dark on carpets.

We also definitely skipped homes where there had been a quick kitchen/bath remodel. You can kinda tell when someone updates the kitchen as their “home” vs. trying to sell it. Again, it was frustrating to walk into a home and see that it had been remodeled sloppily.

Of course a lot of people want “turnkey” homes, and we did see quite a few places that were redone very nicely. Of course those places often wanted to get compensated for the money they sunk into it, which put those places out of our preferred price range.[/quote]
My wife and I have always felt the same way that it really sucks to have to pay for someone else’s remodel when you do not like the style of remodel/materials used. We’d much rather get it for less and do our own work to our preference.

[FlyerInHi]

[quote=sdsurfer]My wife and I have always felt the same way that it really sucks to have to pay for someone else’s remodel when you do not like the style of remodel/materials used. We’d much rather get it for less and do our own work to our preference.[/quote]

I agree. Someone’s treasure is someone else’s junk.

[CA renter]

[quote=sdsurfer][quote=poorgradstudent][quote=sdsurfer] One consideration is that some people have vision and their own particular style so they would appreciate the credit, but many other people do not have vision and you need to do it for them to see the potential.

[/quote]

We definitely had our own vision when we were looking. There were a few properties where it would note “brand new carpets and paint” and our response was “but they’re ugly!” and we’d pass; as a buyer you feel like you’re paying for it, especially if it’s done “wrong”. Paint is less of a big deal, but a lot of people seem to want to go too dark on carpets.

We also definitely skipped homes where there had been a quick kitchen/bath remodel. You can kinda tell when someone updates the kitchen as their “home” vs. trying to sell it. Again, it was frustrating to walk into a home and see that it had been remodeled sloppily.

Of course a lot of people want “turnkey” homes, and we did see quite a few places that were redone very nicely. Of course those places often wanted to get compensated for the money they sunk into it, which put those places out of our preferred price range.[/quote]
My wife and I have always felt the same way that it really sucks to have to pay for someone else’s remodel when you do not like the style of remodel/materials used. We’d much rather get it for less and do our own work to our preference.[/quote]

4th this

When we looked at our house — which hadn’t yet been listed on the MLS; they had just posted the sign and we went directly to the sellers — I told them not to even vacuum the carpets or spend a single cent on anything. We ended up pretty much tearing the house apart and re-doing everything to our liking because we hope for this to be our final house. It would have been a huge disappointment if we had walked in and it was all done-up in flipper “upgrades,” where the seller would want to recoup costs. Their “upgrades” would have been worth ZERO to us.

Livin’ is right about the timing, too. I’ve watched the housing market in multiple zips in SD County and LA County for many, many years. The best “selling season” seems to be right around early February through March. This is when buyers first come out of hibernation, and housing inventory is at relative lows (due to winter doldrums). You might be able to get a higher price a few months later, but you risk having the market turn against you as more sellers enter the market and the most anxious buyers who had waited through winter disappear with those first sales of the late winter/spring season.

IMHO, it’s best to get a somewhat lower price, but sell faster and with fewer headaches.

DO clean the house, even hiring professional cleaners to do a VERY thorough cleaning. Have someone come in every couple of weeks to touch things up, if you can’t do it yourself. Touch up the yard (especially the front) and hire a weekly gardener, if you don’t already have one. Do some painting if there are scratches, marks, etc. on the walls (inside and out), and have the carpets professionally steam cleaned (if you have carpets). If the carpets are gross, it might be worthwhile to put in some cheap carpets, but I also like the idea of offering a credit (we did that with one of our houses, too). And, as you probably know, nothing will sell a house faster and better than a good pricing strategy.

Sounds like you’re making the right decision on the timing because of the tax exclusion on gains (and you never know if that will be repealed at a later time, if you should decide to keep the house and try again later) and your employer-paid closing/moving expenses. Well done.

Good luck on your sale!

[Author]

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