With the frenzied housing market coming to an end, some sellers are considering renting out their homes instead.
Sellers are feeling less hopeful about realizing higher prices for their homes due to the rise in mortgage rates and lower buyer demand. As a result, they Whether to wait out the market, try to sell now, or consider renting a home for the interim, then weigh their options.
“Sellers are beginning to realize that prices may correct before they drop or go up again, which can take years. The situation is more based on whether they capitalize on their equity gains and Take the property, keep the property as a second home or investment, or wait and see how the market reacts over the next few months. said Brian Pearl, principal agent of Pearl Antonucci Group in Boca Raton.
Sellers’ sentiments about the market are slowly changing as they lose the upper hand: A national survey by Frannie Mae shows that 35% of respondents said they think it’s a bad time to sell, 27% increase from the month before.
Still, many South Florida homeowners moving forward with listing their homes for sale, said Amy Snook with Lang Realty in Delray Beach, want to take advantage of current prices because they know that South Florida housing The market may have reached its peak.
“I think they realize that prices for some properties are at all-time highs, but are still in record numbers and almost double what they were a few years ago. Most people realize that they are making their purchases. But can make a difference,” said Danny Hertzberg of The Jills Zedder Group.
But some sellers are weighing their decision to rent rather than sell their properties, as rents are still high.
“We’re seeing more of it now. Sellers are saying, ‘I want my price, but I need to move, so if I can’t sell it I’ll take on a tenant,'” says Green Realty in Cooper City Real estate broker Patty DaSilva of Properties said.
Already 4% of sellers in South Florida have switched from selling their property to renting it, according to a survey of real estate agents conducted by John Burns Real Estate Consulting.
Snook estimates that about 15% of its customers are considering this option, but noted that there are some challenges that come with renting out a property, such as homeowner associations’ rules.
“It’s such a small percentage partly because being a landlord is an entirely different ballgame, and most sellers want nothing to do with it,” said Nicole Stadick, research analyst at John Burns Real Estate Consulting. “A select few are studying the market enough to see the financial opportunity and they are ready to make that long-term bet. This percentage of sellers may increase slightly, but it will always be small.
Buyers are also turning to rentals again. According to the same survey, 18% of South Florida real estate agents reported more rental inquiries from buyers.
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Florida Atlantic University real estate economist Ken H. Johnson said the slight change in rental sellers is a sign of a more general market.
“It’s not going to have a huge impact on the supply of rental units, but taken together, we think it will eventually help slow down or drive down rents a little bit,” Johnson said.
Some sellers are choosing to wait for the housing market to see what happens with prices: Hertzberg said about 10% of his customers are staying longer, while about 25% are waiting for a few months. .
For sellers who feel they have missed the peak of the market, trying to wait out the current downturn Maybe not the best idea. Experts say that it is likely that prices will fall and the market will regain more equilibrium, so another sharp jump in prices is unlikely.
Pearl said, “It may take more than 5 years for them to regain their current values, so unless they plan to keep their property for more than 5 years, we recommend sellers sell now.” are,” Pearl said.
Agents are seeing more price cuts as sellers who tried to match prices six months ago have to recalculate.
“It’s a different market and we need to raise the real price a little bit more,” Snook said.