Sellers, it’s your time for your home to shine! Buyers are out in full force searching for their dream homes. Unfortunately, there aren’t enough homes for sale to satisfy demand. Real estate agent’s insights shed some light on the trajectory of the market – especially as housing prices continue to skyrocket.
Let’s take a look at how the rising prices could encourage would-be sellers to finally bite the bullet and finally put their homes on the market. The question is, will it be enough to balance the market?
Low mortgage rates could encourage more buyer activity
In April, home prices increased by 19.1%, so a home listed at $286,800 would now be priced at $341,000. The seller of that home would make a nice profit of $54,200! Pretty good right? While this increase would be enough to give buyers pause, the fact that mortgage rates are still pretty low.
But with that said, realtors believe that once mortgage rates start to climb again, buyer activity is likely to slow down. How high do the rates have to increase? 30.4% of agents say buyer activity will slow when rates hit 4%, but 22% believe activity will slow around 4.5% and 23.3% believe 5% is the “magic” number to slow buy demand.
Would-be sellers embrace the carpe diem mindset
It’s a seller’s market and people are finally starting to come around to the idea that they could sell and earn a sizable profit if they have enough equity. Around 49.3% of agents say folks are putting their homes on the market now while the market is in their favor. 48.3% of agents predict that as the year pushes on, there will be an influx of new homes on the market.
As great as that sounds, if your home isn’t up to snuff, it could actually dissuade buyers from putting an offer. Buyers are willing to pay high prices for a home and they expect to buy a move-in ready home (or close to it) with their desired upgrades. If not, they have no problem moving on to the next house.
Empty-nesters could downsize while profiting
Homeowners whose kids are grown and have moved out of the house are prime candidates for putting their homes on the market. 73.4% of realtors in the Northeast say almost-retirees are packing their bags and putting their homes up for sale so they can cash in while prices are still on the rise.
Empty-nesters aren’t the only group of homeowners that are making the most of this market. Remote workers and new-ish homeowners (young homeowners who want to sell their first or second home) are also cashing in because they could sell their home for x-amount and then move to a cheaper location or even rent for a while.
New listings brought on by FOMO
It’s true that now is a great time to be a seller, but you also have to take into consideration how challenging it will be trying to buy and sell at the same time. You may sell your home lickety-split, but what happens if you’re unable to compete with other buyers in your market? You’ll be stuck in a housing-limbo and you may be forced to move further away than you’d like or put an offer on a house that you may not love.
Navigating this market is a delicate balance, but it isn’t always going to be this way. We recommend that before you make any rash decisions, look around your desired area and see what houses are going for. Then consult a realtor to get their opinion on what your house could sell for. If the sale price is enough to pay off the current mortgage and have enough left over for a down payment, then you might feel more comfortable selling.