If you’ve been sitting on the fence about selling your home, it might be time to hop off. Now. To put it in other terms: this is the year of the home seller. So what are you waiting for?
A combination of factors has come together to make this year a prime seller’s market for most of the nation, including our area.
First: Mortgage rates continue to be low. Low mortgage rates translate into lower monthly costs which entices buyers. This is good for sellers.
Although mortgage rates have been ticking up slowly to slightly over 4%, the rates for a 30-year fixed mortgage are still hovering near 30-year lows. For now.
Second: Inventory is shrinking. Remember in Econ 101, when you learned that low supply and high demand leads to rising prices? Well it’s true, even in real estate. When inventory shrinks, available homes become more valuable. Homeowners are witnessing unprecedented leverage as buyer demand continues to spike while inventory levels of homes for sale remains historically low. That’s a good thing for sellers.
In our area, the number of homes actively on the market is down by 26% compared to just a year ago. Despite the fewer number of homes on the market, sales in our area are increasing. Last year in the surrounding 8 counties 2,738 homes were sold. This compares to 2,754 homes sold so far this year with 4 months still left!
And get this: Not only are there fewer homes for sale, but the time those homes have spent on the market has decreased year over year as well. If priced correctly, the typical home should move quickly. Sellers who were once worried about having to prep homes and display them for long periods of time no longer are faced with that issue. And that’s another boon for sellers.
Homes in our area are spending an average of 61 days on the market which is down by 10% over a year ago.
Third: Home prices are rising. Lower inventory and greater demand have pushed up home prices. Nationwide, the average list price of homes for sale is up 10% over a year ago. Locally, it’s even better! List prices are up 14%!
Fourth: Job markets are strengthening. As unemployment decreases and wages increase, consumer confidence climbs. Increased confidence spurs buyers to jump into the market. Additionally, increased wages means that buyers have more discretionary income for big ticket items including homes.
Fifth: Rental prices are appreciating. Renters have been seeing a rise in rent. It’s actually outpacing the rise in the cost of purchasing a house. This is causing more and more people to jump out of the rental market and into the housing market.
As to how long these trends will continue, no one can say for sure, which is why potential sellers should pull the trigger sooner rather than later. Even if you previously had your home for sale without any luck, consider jumping back into the market now! It might be the perfect time to find a buyer.
By Bonnie Marlow, Realtor, Cisco Realty