The FINANCIAL -- If you’re planning on selling your home this year, you’re probably making a pretty good financial decision. Economists and real estate financial experts all agree that we are in the middle of seller’s market.
A seller’s market is mostly about supply and demand, but there are other contributing factors. When inventory exceed the amount of buyers, you are looking at a seller’s market.
Another sign is when homes are selling quickly and at prices above asking. If you’re selling in this environment, you have the advantage and might even receive multiple bids.
Let’s take a closer look at the reasons 2018 may be a prime time to list and sell your home…
Inventory Is Low And Demand Is High
This one couldn’t be any easier to figure out: the amount of homes for sale exceeds the number of interested buyers in the market. Basic supply and demand. In this case, it puts sellers in the driver’s seat.
As a seller, you can lean towards the high end when setting your price. Not so high that you’re out of everybody’s range in your neighborhood, but just high enough that someone will put in an offer. And don’t get too worked up over your first offer, because another one is probably just around the corner.
Explain to the buyers that you need a couple days to mull it over. In that time you can prepare your counter offer and wait for another offer to roll in. If multiple offers do become a reality, then you’re that much closer to a bidding war and that much closer to getting more than you listed for.
More Buyers In The Market
The other side of the coin is buyers: there are many reasons that they are motivated to get into the market right now. Low rates, (but rising!) consumer confidence and rising equity are all contributing to stoke the buyer fire.
Low Interest Rates
These aren’t the lowest rates we’ve seen, but historically speaking, they are pretty good. The current 30-year mortgage rate is about 4.40 percent, according to Bankrate. With mortgage credit still readily available and affordable, but rates ticking up slightly, buyers are looking and they’re serious.
Whether you believe the economy is riding high solely because of the new administration or you feel it’s simply continuing the path it was put on, there’s no denying that the U.S. economy is strong.
Unemployment is down, job numbers are up, the GDP is growing and consumer confidence is solid. It all adds up to more buyers having more money to spend.
Home Values Are Still Rising
Throughout the country, home prices continue to make gains. Buyers know they can get more for their own homes when they sell, giving them more cash to buy a home on the market. Purchasing an asset that appreciates doesn’t hurt either.
However, lingering in the future, are words like “correction” and “bubble burst.” Words and terms no one in the real estate industry wants to think about, but something that must be considered. They are also possible realities that might be encouraging buyers to buy now.
According to this article from CNN-Money, there are tangible signs that the housing market, specifically housing financing, are displaying recession warning signs. The Fed is expected to raise interest rates two more times before the year ends. These are all factors that could make the argument that now is the time to sell.
The Millennial Market
One generation has worried and troubled real estate experts more than ever. Millennials, those born between 1981 and 1996 (22 to 37 years old), simply weren’t buying homes they way generations before them did.
Although common sense pointed to the fact that five-to-ten years ago Millennials weren’t ready (life-experience wise) or financially secure enough to buy a home. Or the fact that they personally witnessed the Great Recession and we’re still scared from that experience. Or the fact that many were under a mountain of student loan debt.
Millennials also seemed to prefer renting over owning, and some seemed to scoff at the concept of homeownership entirely. This alarmed the real estate industry to no end. Well, it looks like Millennials have finally come around.
As first-timers, Millennials are forecasted to account for 43 percent of homebuyers in 2018, according to realtor.com data. And thanks to a host of factors, should only get stronger.
You can work with a full-service real estate agent, a “discount” brokerage and agent, or you can go it alone as a FSBO (For Sale By Owner). Websites like Fizber specialize in helping For Sale By Owners by providing marketing tools and tips on selling your own home.
How long can this seller’s market last? No one’s sure, trying to time the real estate market is a fool’s game. But one thing is for sure; it’s a great time to sell a home if you’re in the position.