While the housing market forecast for the second half of the year remains positive, there may not be a better time to sell than right now. Here are four things to consider if you’re trying to decide if now’s the right time to make a move.
1. Your House Will Likely Sell Quickly
According to the most recent Realtors Confidence Index released by the National Association of Realtors (NAR), homes continue to sell quickly. The report notes homes are selling in an average of just 17 days.
Average days on market is a strong indicator of buyer competition, and homes selling quickly is a great sign for sellers. It’s one of several factors that indicate buyers are motivated to do what it takes to purchase the home of their dreams.
2. Buyers Are Willing To Compete for Your House
In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview:
“The frequency of buyers being willing to pay more than the market data supports is increasing.”
This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.
3. When Supply Is Low, Your House Is in the Spotlight
“Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.”
There are signs, however, that more homes are coming to market. Odeta Kushi, Deputy Chief Economist at First American, notes:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
If you’re looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.
4. If You’re Thinking of Moving Up, Now May Be the Time
Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn’t meet their needs.
If you’re not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.
But these near-historic low rates won’t last forever. Experts forecast interest rates will increase in the coming months. Nadia Evangelou, Senior Economist and Director of Forecasting at NAR, says:
“Nevertheless, as the economic outlook for the United States looks brighter for the rest of the year, mortgage rates are expected to rise in the following months.”
As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you’ve been waiting for the best time to sell to fuel your move up, you likely won’t find more favorable conditions than those we’re seeing today.
In Other Words…
With supply challenges, low mortgage rates, and extremely motivated buyers, sellers are well-positioned to take advantage of current market conditions right now. If you’re thinking about selling, let’s connect today to discuss why it makes sense to list your home sooner rather than later.
This Isn’t Your Typical Summer Housing Market
In real estate, it’s normal to see ebbs and flows in the market. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn’t a typical summer. As the economy rebounds and life is returning to normal, the real estate market is expected to have an unusually strong summer season.
Here’s how this summer is stacking up against the norm and what it means for you.
Inventory is increasing.
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have been rising since February of this year. Looking at the graph below, there’s a clear upward trend, as shown in the green bars. Currently, there’s roughly a 2.5 months’ supply of homes for sale. And while inventory is trending up as more houses are coming to the market, it’s still much lower than several of the previous summers, as the orange bars indicate.
If you’re looking to buy, some relief is on the way in the form of more homes coming to the market. Just remember, we still have less inventory than the norm, so be patient in your search.
If you’re thinking of selling, now is the time. Work with your agent to list your house before it has more competition on the market.
Time on the market is still shorter than normal.
Unlike the typical summer trend, time on the market is moving at the fastest speed we’ve seen since NAR started collecting this survey-based information in 2011. The most recent Realtors Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling at a much faster pace than a typical summer, which the orange bars represent.
If you’re looking to buy, this means you need to be prepared to move fast. Brace for a quick pace and rely on your agent to stay in the know on the available homes in your area.
If you’re thinking of selling, data shows your house will likely sell quickly. If you’re worried about where you’ll go once your house sells, consider a newly built home as a good way to move up.
Price appreciation is still rising.
The last big factor making this an unusually strong market this summer is home price appreciation. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), we’re currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation we’re experiencing today. Our current levels are well above what we’ve seen in recent summers, shown by the orange bars.
If you’re looking to buy, competition and bidding wars are driving prices up. Getting pre-approved can show the seller you’re serious and help you know what you can afford. Once you do, work with your agent to make a strong offer that stands out.
If you’re thinking of selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.