Many home buyers are already home owners, and  are taking advantage of prices before they go higher to simplify lifestyle, or to gain more space – and will ultimately sell their previous homes.  Most of these buyer/sellers either need to sell their current home to accomplish the new purchase, or just want to keep life easier by avoiding the hassle of finding a renter and maintaining both properties, so won’t wait to sell.

 A few home buyers  think a higher price in a year or two may make it worthwhile to delay putting their old house on the market.  So, they would like to know how high prices are going to be a year from now.  With no crystal ball, the best information may be predictions made by the experts:

 National Association of Realtors predict an approximate 3% appreciation rate in The Niche Report 10/29/12.

 However,  that prediction is an average for the nation.  In Phoenix, where we’ve seen upwards of 20 to 35% increases (depending on community and price range, click here for a median price sampling in several valley sub-markets) across the metro area, you would expect something better.  After all, our prices dove further than average, and many of us are hoping to recoup market highs in the not too distant future.  When will that be? 

 Last Monday’s Reagor blog in the Arizona Republic  offered several fairly bullish predictions, as well as a couple of more moderate ones, in Home Prices up in metro Phoenix and forecasts for more increases.  Among the most optimistic is that values will climb another 50% by 2015 of 2016.  These aggressive stances assume strong economic and job growth.  Before getting to excited, it might be wise to  listen to another, and perhaps more pragmatic, outlook.  Mike Orr, an analyst with the W.P. Carey School of Business at Arizona State University, agrees that prices will continue to climb, but cautions that there is “always potential for prices to dip.”    He cites that a huge unknown is how all the investment purchases, and the timing of those ultimate re-sales, will affect the market. 

 Further, earlier this week Michael Orr,  says that it could be several more years before we reach pricing levels last seen in 2005.  However, if employment improves, creating more demand, pricing gains could happen sooner. (Answers to market questions, The Arizona Republic, 11/5/2012).

 Selling while the market is “hot,”  or holding onto that house for a year or more, is a big decision.  If you are under water now, and need another year or two to get your equity back in the black, the answer may be very clear.  But if you can sell quickly and easily now, deciding to wait for a higher return may sound promising.   But timing, future economic development surprises, possible interest rate increases affecting home sales when you do sell, expenses inherent in maintaining the old property, chances of lucking into a great renter,  are some of the things best thought through.  Need to discuss?  Give me a shout!