If you’ve been sitting on the fence about selling your home, the time to hop off is NOW. To put it in other terms: 2017 is poised to be the year of the home seller, real estate experts say. So what are you waiting for?
Reason No. 1: Mortgage rates are still low
It’s all about rates, baby. Low mortgage rates translate to lower monthly costs. Lower costs entice buyers, which is good for sellers. Although mortgage rates have been ticking up since mid-October to slightly over 4%, the rates for a 30-year fixed mortgage—the most popular home loan—are still hovering near 30-year lows. But all indicators point to more increases this year. They could be in the 4.6% to 4.8% range by the end of the year. What does that have to do with home sellers? Well, potential buyers who are armed with that knowledge might hustle to close on a home before a rate hike.
Reason No. 2: Inventory is shrinking
Remember in Econ 101, when you learned that low supply and high demand lead to rising prices? The same is true—in spades—for residential real estate. When inventory shrinks, available homes become more valuable. As Martha Stewart would say, that’s a good thing for sellers. Quite simply, sellers this year have the least competition.
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. And that’s another boon for sellers.
Reason No. 3: Home prices are rising
Lower inventory and greater demand have pushed up home prices. The median existing-home price of $263,000 in the Providence/Warwick Metro Market was up 6.7% in 4th quarter 2016 compared to the year prior. And that’s no fluke, as prices have gained over the last four and half years. Higher prices particularly benefit the seller whose property value plunged during the recession, sometimes to less than what was owed. Thanks to rising prices, many homeowners whose property was underwater can now sell without suffering a big loss.
Reason No. 4: Job markets and consumer confidence are up
As unemployment decreases and wages (finally) increase, consumer confidence will climb. The National Consumer Confidence Index®, which had increased in February, improved sharply in March. The Index now stands at 125.6 (1985=100), up from 116.1 in February. Increased confidence will spur buyers to jump into the market—which is, you guessed it—more good news for sellers.
Reason No. 5: Great market for downsizing
There are opportunities for a seller-turned-buyer who wants to downsize in this market. You can lock in financing rates that you’ll never see again, optimize your equity on the sale of your home, and “rightsize” your home and living expenses—a tremendous trade off! Check out my recent blog post on Rightsizing