With the frenzied housing market coming to an end, some sellers are considering putting their homes up for rent instead.
Rising mortgage rates and lower buyer demand are causing sellers to feel less hopeful about garnering high prices for their homes. As a result, they’re weighing their options when it comes to whether to wait out the market, try to sell now, or consider renting the home out for the interim.
“Sellers are starting to realize that there may be a correction in prices before they level off or go up again, which could take years. The situation is more along the lines of whether they cash in and take their equity gains, hold 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 with the Pearl Antonucci Group in Boca Raton, Florida.
The case for renting vs. selling the home
Sellers’ feelings about the market are slowly changing as they lose the upper hand: a national survey from Frannie Mae shows that 35% of respondents said they think it’s a bad time to sell, an increase from 27% the month before.
Still, many homeowners are going ahead with listing their homes for sale, wanting to take advantage of current prices as they realize that the housing market has probably reached its peak, said Amy Snook with Lang Realty in Delray Beach, Florida.
“I think they realize prices for some properties are off the all-time high but are still at record numbers and almost double what they were just a few years ago. Most realize that they can make up the difference on their purchase,” said Danny Hertzberg of The Jills Zeder Group.
But some sellers in South Florida are weighing the decision to rent their properties, instead of selling, as rents are still high.
“We are seeing that more now. Sellers are saying ‘I want my price, but I need to move so I will take a tenant if I can’t sell it,’” said Patty DaSilva, real estate broker with Green Realty Properties in Cooper City, Florida.
Already, 4% of sellers in South Florida have switched from selling their property to renting it, according to a survey of real estate agents done by John Burns Real Estate Consulting.