If you’ve been on the fence regarding selling your home in 2017, it's time to get out there and actually do it. Here are some of the best reasons why you should sell your home in 2017:
Low Mortgage Rates
if you are familiar with low mortgage rates, simply put the lower the mortgage rate, the lower your monthly cost will be. Because current mortgage rates are still low, many buyers are very interested in making a purchase a lot sooner than later. This is music to a seller’s ears.
Even though rates have been increasing little by little since around October, many of the most popular home mortgage loans have rates that are still at historic lows. According to market experts, they are expected to remain around the 4% level for a bit longer prior to adjusting up further. Since it’s rare for mortgage rates to increase or decrease in a straight line, they may get to 4.6% – 4.8% sometime before the year is over with.
Because rates are still expected to remain low enough by December 2017 to entice buyers, there is no reason to stress if you aren’t able to get your house ready for market immediately (although it is recommended that you do). The majority of experts see anything above 5% as the point where home prices will start to decline. So, 2017 is still a year that sellers can take advantage of things.
A Decline in Inventory
Almost everyone has heard about the concept of supply and demand. The less of something there is, the more value it tends to have. The same goals for the real estate market. As the number of homes available for purchase decline, the value of those that are going to increase. This is a fantastic situation for sellers.
Prior to the market crash regarding the housing bubble, there were about 4.04 million homes available for sale on the market. By November 2016, only an estimated 1.85 million homes were available for sale. That 1.85 million in November 2016 was actually even lower than November 2015. The entire housing market has dropped by 54% since 2007.
This means that for sellers, there is little to no competition in the market.
To further illustrate the demand versus the actual supply, the time that a home has remained available for sale on the market has decreased significantly year after year. This means that they are being snatched up as soon as possible by buyers looking to make a purchase while the homes are still available. Sellers who were once worried about having to prep homes and display them for long periods of time no longer are faced with that issue. Homes on the market are going fast all across the country.
Strong Buyer Demand
It's no secret that buyer demand is back, and back in a big way from the real estate market collapse nearly 10 years ago. Many buyers are realizing that this is a historic time to buy real estate. With interest rates at historic lows, money is on sale. This is creating a compelling argument that purchasing a home is much better than renting. Especially, with how fast rental prices are appreciating.
If you're looking to buy a home there is a good chance you will be competing against many others in 2017. Between interest rates, improving job markets, rental appreciation, and the general confidence in the economy, there is a strong buyer demand right now. One of the ways in which you can make your offer the most compelling is to put yourself in the seller's shoes. What is it the seller is looking for in an offer? Sometimes it's worth asking the seller straight up what it's going to take in a multiple offer situation.
With strong buyer demand like we have right now, it's a great reason to list your home for sale in 2017!
Rising Home Prices
Due to there being a low inventory and a high demand, the cost of homes has increased significantly. Around November 2016, the average price of an existing home had increased by 6.8% from the previous year. They had gone from $220,000 up to $234,900 in the span of 12 months. That had marked the 57th month of a year over year increase.
The majority of the sellers whose property value greatly declined during the recession are now benefiting from these higher prices. It has made it so that they can now sell their homes without the fear of taking a huge loss. Homebuyers in 2017 will find themselves in a market that is a bit more balanced than before. Despite mortgage rates increasing, many people who are selling their homes have managed to recover enough equity to make doing so feasible.
Job Markets Are Becoming Stronger
Lately, unemployment has been decreasing and wages have been increasing. Because of that, consumer confidence has been growing. This growing confidence will inspire more and more buyers to actually get into the housing market. As a seller, this is excellent news for you.
These things happening altogether create a beautiful cycle. Everything in the cycle is connected. As the consumer confidence grows, it leads to the purchasing of bigger items such as homes and vehicles. With the major purchases out of the way, there is money available to purchase various other things. These various other purchases help to strengthen the economy which in turn, allows companies to produce more, higher more, and pay more. And then, the cycle begins again.
Possible Interest Rate Increase
there are a ton of people who have been concerned that interest rates will be rising in 2017. As more and more potential homebuyers start to think this as well, you can expect to see many of them deciding to make their home purchase as soon as possible. Putting it off until later will not be advantageous to them. They will lose buying power. Having your home available to these individuals will be very beneficial in increasing your chances of selling.
There’s a New Leadership
Anytime there’s new leadership in office, there’s always plenty of speculation. Furthermore, there is also a lot of uncertainty. People are never certain as to what exactly will and won’t happen. Now that Donald Trump is president, if it’s believed that his administration will make buying a home much harder for people, then you should be looking to sell yours as soon as possible. Studies have shown that a lot of individuals fill that many of the Republican’s proposed reforms will require potential buyers to come up with bigger down payments to make their home purchases. This will cause the number of buyers to decline which in turn will leave sellers with fewer prospects. Keep in mind that speculation is pretty much just that, but if in your opinion, it seems highly likely to occur, then you should prepare for it accordingly.
Nothing is known for sure, but there is a strong consensus that rates could mimic what they’ve done at the end of 2016 and continue to increase during 2017.
The Millennials Are Coming
due to the economic situation that many millennials have found themselves in, they haven’t been able to achieve the same milestones that previous generations had. Things such as starting a family and purchasing a home were pushed to the bottom of the agenda for this generation. Now that the job market is starting to look much better for individuals born in this generation, you can expect to finally see home ownership start to increase as well. The majority of the millennial home buying will likely occur in the Midwest and West Coast areas due to a lot of universities in that area coupled with the lower cost of homes and living expenses.
Renting Is Becoming Less Affordable
Numerous individuals all across the country have been seeing a rise in rent. It has become so common, that it’s actually outpacing the rise in the cost of purchasing a house significantly. In 2017, expect to see an even lower demand for rental units as more people decide to take their savings and become buyers. Selling your house during this time provides you with more opportunities to encounter someone who’d be more than happy to make your old home their new one.
The Flip-Side of the Coin
For many home sellers that do decide to sell in 2017, more than likely, they’ll need to buy another home. In this instance, they’ll become buyers and everything that works for them as sellers will now become factors that work against them.
Final Thoughts on Selling in 2017
There are some options available to sellers. Renting is an option that might work temporarily in hopes of prices lowering sometime in the future, but the savings you manage to obtain on the cost of a home could be given right back when rates go up to around 6% (a number predicted to happen around 2019 – 2020).
The gist of it all is not to hold off on selling because mortgage rates won’t stay the same forever.
If you sell now and decide to buy, you’ll have the opportunity to get some of the best rates ever. These rates will probably never be seen again and because of that, you might be able to make selling a home and then buying one work out in your favor.
Hi there! I'm Ryan Fitzgerald, a REALTOR in Raleigh-Durham, NC and the owner of Raleigh Realty. Chances are you and I share a similar passion, Real Estate! I also have a passion for technology, sports, and people. Would love to hear from you. Drop me a note in the comments section below and feel free to share this article socially!