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The decision to sell your home is influenced by three key factors: your financial state, your personal situation and the local housing market. The real estate market in any area is cyclical, with its share of ups and downs. Over the long term, you’ll find that housing prices tend to increase. So, if you’ve sold a home during a strong market, you'll likely also sell a home during a down market at some point as well.
Selling in a Strong Market
Even if the housing market in your area is booming at the time you’re planning to sell, you don’t want to get carried away. You may be tempted to price your house higher than its value to take advantage of the hot market. However, in doing that the sale could end up taking longer than it would have if you priced it correctly and you may get less from the sale than you anticipated. Additionally, be mindful of market conditions in your current area, as well as those in the area that you’re moving to. That way, you can appropriately time the sale of your current home, as well as the purchase of your new home.
Selling in a Down Market
Although a slow real estate market can make it difficult to sell your home, you can still manage to garner a respectable profit by selling it, as long as you still have sufficient equity in your home. If you're staying in the same area or moving to another slow housing market, you're likely to be trading one reduced-price house for another. Whereas if you're moving to a more expensive market or to a stronger housing market, you do need to be sure that spending more on housing doesn't compromise your personal and financial goals for the long term.
If you find that you must move or relocate and prefer not to sell your home in such a slow market, you can always rent out your home until the market gains strength again. Keep in mind that converting your home to a rental property will have some tax consequences, so be sure that you understand how this will affect you before putting a “for rent” sign in the lawn.