“IS NOW A GOOD TIME TO SELL?” WE THINK SO.
*Note: We originally published this article in the fall of 2021. While much has changed since then, we’ve elected to leave it out there for a bit of important historical perspective, and a refresher on recent market conditions for those who are more data-driven. For our take on the best moves in today’s market, see our recent article, “Should I Sell in 2023?”
As you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? For those who need or wish to sell before making their next purchase, you want to time it just right so you can get the most out of the sale. You also want to know you’re making a good investment when making the purchase. What you may not realize? That opportunity to get the best of both worlds is already here.
You don’t want to wait until spring to spring into action. The current market conditions make this winter an ideal time to move. Here’s why.
1. The Number of Homes on the Market Is Still Low
Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers (not to mention agents) in the market than there are homes available, and that means buyers are eagerly waiting for your house. Listing your house now makes it the center of attention. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get more strong offers this season. Just remember: Experts — including us — project more inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this:
“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.”
Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.
2. Your Equity Is Growing in Record Amounts
Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months. Many have gained substantially more.
That much equity can open doors that were previously closed. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase.
3. While Rising, Mortgage Rates Are Still Historically Low
In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:
In the 2000s, the average mortgage rate was 6.27%
In the 1990s, the average rate was 8.12%
Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Most experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.
4. Home Prices Are Going To Keep Rising with Time
According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.
What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.
5. The Price vs. “The Price”
Let’s talk about actual cost, as opposed to the sticker price. We all know that, when we finance a purchase, the final amount paid for the benefit of ownership without coming out of pocket typically exceeds the “sticker price,” no matter what the purchase. This is especially true when financing the purchase of real estate, which can take 15 — or more often, 30 — years to pay in full. That’s thousands and thousands of dollars added to the final price, not to mention cost of ownership.
Why does this matter? Well, with all this talk of market corrections, many people tell us they’d like to “wait for the market to cool.” What they mean is, they want to wait for prices to come down before making the purchase. The flaw in this thinking, however, is clearly illustrated above. Even at a lower “sticker price” (which is unlikely in itself), the rise in interest rates will match, or even exceed, whatever perceived savings you might be expecting.
Is now a good time to sell, and invest? From our perspective, we think so. This is a long game. Don’t wait to buy real estate… buy real estate, and wait. If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Connect with us today so that we can help get you set up for real estate success in 2022.