If you are thinking of selling, now is the time, for just about everybody to either make that move up buy or buy that first house, probably.
Why is that true? On average, in Delco, Chesco and Montco, we have under 6 months inventory of houses for sale. That means we are in a seller’s market, there are more buyers than sellers and prices are going up.
If you are thinking about selling your present house and moving up, it makes sense to do it now. A year from now, your house will be worth more, but that move up house will have increased in value even more. Net, net, it will cost you more if you wait. Plus interest rates will probably be higher.
If you are a first time buyer, now is the time to make that move. Again, prices and interest rates will only be higher a year from now, probably.
However, the above is not true for every in every situation. If you are a homeowner who is thinking about downsizing and moving to a less expensive home, it might make sense for you to wait. That is because the house you buy will have gone up less than the house you own. Wild card here is interest rates. My guesstimate (and that is exactly what it is – an informed guess) is that you are probably better off making the move now.
For whom would it not make sense to sell now? Not many people. If you are just going to put the money in the bank, you are better off to wait because your house will probably go up by 3-5% a year for the next few years.
If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.
Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:
“Would-be buyers face a dilemma: There will be more homes on the market over each week of the next three to four months, but there will also be even more prospective buyers. We are entering the busiest season of home buying with the lowest amount of inventory in three years. To be competitive, buyers should get pre-approved for a mortgage and be ready to act quickly if they find a home that meets their needs.”
Smoke goes on to say:
“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster. So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”
In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.
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