Timing the Housing Market in Houston

The Wall Street Journal / June Fletcher

Q. My husband will retire in December. Our plan is to sell our family home, which we've owned for 19 years and is almost paid off, and move to a retirement community near our daughter in Atlanta. Because it takes a long time to sell homes these days, we figure we should put our house on the market now if we want to have it sold by Christmas. But we read that real estate prices may start improving next year, so we wonder whether it would be better to wait until next spring's selling season. What should we do?
—Houston

A. Normally I'd suggest that you not try to time the real estate market or let its cycles dictate when you move. But since you don't seem to be under any compelling financial pressure to relocate, I recommend that you wait.

I wouldn't necessarily give this same advice to everyone: Overall, the expiration of tax credits for home purchases, coupled with an expected rise in foreclosures and short sales and higher mortgage interest rates, is likely to keep home prices weak over the coming year. So for most people who want to sell, there isn't much to be gained from holding out for more favorable market conditions.

But given where you live, and where you want to move, procrastination is likely to pay off for you. According to FirstAmerican Core Logic, which forecasts home price trends based on a repeat sales index that tracks prices of the same homes over time, Houston apartment and home values have been rising—they were up 4% in February from a year earlier, and are expected to rise an additional 3% by February 2011. Meanwhile, prices in Atlanta, where you're headed, dropped 2.3% in the year ending in February and are expected to fall an additional 4.5% over the next year.

Moreover, it may not take as long to sell your home as you expect. According to Altos Research and Real IQ, the average time a home takes to sell in Houston has been shrinking: Down 10.9 %, to 122 days, from January to March. If you put your house on the market now and it sold in four months time, and closed a month later, you'd have to find another place to live for at least three months before your husband retires. According to ads on Craigslist, furnished one-bedroom apartments in extended-stay hotels can easily run upwards of $2,000 a month in Houston; add to that the cost of keeping your belongings in storage. Then there's the incalculable cost of living in limbo, a state of anxiety that puts pressure on you to find a new house in a new neighborhood quickly, even if it isn't quite what you wanted.

There just doesn't seem to be any upside to your listing your home now. You'll be better off if you use the time before your husband's retirement for de-cluttering, landscaping and prettying-up your home so that it draws top dollar next spring.