Do you want to sell your home before a recession: Here’s what you need to know.
The process of selling your home can be stressful at any time of the year. But what is especially challenging is when a recession is looming on the horizon, and you have to deal with the added stress of selling your home at the right time.
There’s no denying that we’re in the midst of an economic downturn. While it’s impossible to say when the next recession will hit, it’s always better to be prepared. If you’re thinking of selling your home, now is the time to act. In this post, we’ll explore what you need to know in order to sell your home before a recession hits.
Outlook on the UK economy
Let’s take a look at the current state of the UK economy market before we discuss further how you can buy or sell a home before a recession.
According to economic experts, the UK is about to experience a serious recession as a result of the current financial situation. The BCC forecasts a recession in 2022, with inflation reaching 14% and lingering weakness in growth continuing into 2024. In other words, in addition to the massive unemployment rate and the failure of businesses, there will also be a growing level of job uncertainty and wage reductions.
There is no doubt that an increasing number of people will become cautious about selling or even buying a home, which is undoubtedly one of the most important investments of their lives.
So when should I start to think about selling my home?
While it’s impossible to know exactly when the next recession will hit, there are some key signs to look out for. If you see these signs in the economy, it might be time to start thinking about selling your home.
Drop in consumer spending
One key sign of an impending recession is a decrease in consumer spending. This can be caused by a number of factors, such as a loss of confidence in the economy or a rise in unemployment. If you see consumer spending start to drop, it’s a good idea to start paying attention to the housing market.
Rise in interest rates
Another sign of a recession is a rise in interest rates. This makes borrowing more expensive, which can lead to a decrease in consumer spending. If you see interest rates start to rise, it might be time to start thinking about selling your home.
Of course, these are just two of the many signs of a recession. If you’re concerned about the economy, it’s a good idea to speak to a financial advisor. They can help you assess the risks and make a plan for what to do if the economy takes a turn for the worse.
What you need to consider before selling your home
Financial situation
The first thing you need to do is assess your financial situation. Take a close look at your budget and see how much wiggle room you have. If you don’t have much leeway, it might not be the right time to sell. On the other hand, if you have some savings set aside, you might be in a good position to weather a recession.
Reasons for selling
You need to think about your reasons for selling. If you’re simply trying to cash in on your equity before prices drop, you might not be successful. On the other hand, if you have a genuine need to sell, such as a job loss or a move, you’re more likely to find a buyer.
House value
You need to be realistic about your price. In a recession, buyers will be looking for deals, so overpricing your home is likely to scare them away. If you’re not sure what your home is worth, consult with your local estate agent. They’ll be able to give you a realistic estimate of what your home will sell for in today’s market.
Asking price
If you’re selling your home during a recession, it’s important to be realistic about the price you’re asking for your home. Potential buyers are going to be looking at comparable homes in the area and making their decision based on that. If you overprice your home, it’s likely to sit on the market for a long time without any offers.
Competition
Another thing to keep in mind is that the number of buyers looking to purchase a home during a recession is typically lower than during boom times. This means that there’s less competition for buyers, and you may have to wait longer to find a buyer for your home. However, if you are patient and pricing your home correctly, you should eventually be able to find a buyer.
Make an informed decision
Selling your home before a recession hits can be a smart move, but it’s not for everyone. However, we hope our advice and updates on current trends help you make an informed decision when planning to sell your home before or during a recession.
Stay tuned for more topics discussed around the current housing market in the upcoming months.
