Fed cuts interest rates for first time since 2008 but sends confusing signals about what’s nextBY Heather Long, Washington PostThe Federal Reserve reduced the benchmark interest rate Wednesday
Why Is Now The Best Time To Sell
Why is now the best time to sell???
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Welcome to the "Seller's Market" - a homeowners ideal time to sell! Right now, especially in our area, the demand for homes is higher than the supply. Since there are more home buyers in this current market than there are sellers, property owners are able to get a premium for their homes. With the lack of inventory available, bidding wars are occurring and driving up the prices of homes. In some cases, sellers are actually able to sell their homes for more than the market would generally allow. All this is great news for people who are looking to sell and cash out on all their hard earned equity.
Here are some of the best reasons you should sell now:
1) Interest Rates Are Still LOW! For the past decade interest rates have been extremely low, which has helped millions of home buyers with getting affordable mortgages. It is very important that buyers are able to obtain affordable mortgages because this is part of what drives the current seller's market. We all know the saying, "good things don't last forever" and with low interest rates that is certainly true. According to Forbes, "In December the Federal Reserve bumped short term interest rates to between 0.50% and 0.75%, the second hike in a decade. The 25 basis point move left rates low by historic standards and did not have a huge impact on mortgage rates. However, the Fed's policy makers indicated they anticipate three hikes in 2017, which could have a larger effect. That's up from the two increases officials projected before the election." Now I don't believe we will see any skyrocketing interest rates like those experienced back in the 80s, but since buyers have been so accustomed to the lower rates, even slight increases like those projected over the next year will cause a drop in home purchases.
2) Lack of Inventory. Inventory is at a 10 year low and the amount of buyers in the market has increased throughout the past years. According to Housing Wire,"Comparing the national housing stock in the 100 largest metros from the first quarter of 2012 to the first quarter of 2017 shows starter homes witnessed the largest drop in inventory. During that period, the number of starter and trade-up homes fell 8.7% and 7.9%, respectively. Contrarily, inventory of premium homes fell only 1.7% from 2012 levels.And as inventory becomes more scarce, median home prices continue to rise. Starter and trade-up homebuyers need to spend 2.9% and 1.6%, respectively, more of their income than last year to buy a home." The lack of inventory is the best sign of a seller's market and is a great reason to get off the fence and add your property to the much-desired market.
3) Home Prices Are Rising. With the decrease in inventory and the increase in buyers, the two forces combined have driven up home prices, which is why sellers are getting more of a premium for their home. Prices are the highest they have been in almost 10 years and if you have built equity in your home now is the time to cash out. Higher prices particularly benefit the seller whose property value plunged during the recession, sometimes to less than they owed. Thanks to rising prices, many homeowners whose property was underwater can now sell without suffering a big loss. Another indicator that housing prices will continue to rise is the fact that there are far less developers building new homes to keep up with the demand. Ted Wieseman, an economist at Morgan Stanley in New York, said, "The country needs a lot more new home construction to alleviate the supply shortage versus a rising pace of household formations in the past couple years and a recent shift back in favor of homeownership from renting." The population in the U.S. is constantly growing and if there are not enough new construction homes being built, the existing homes will be more valuable to the end consumer, which puts more money in your pocket!!
4) Job Markets and Wage Increase. Since early 2017 the job market and wage increases across the board have gone up. Gus Faucher, chief economist at PNC Financial Services Group in Pittsburgh, said, "The housing market continues to look quite good. Consumers also have more jobs and are getting higher wages, so they will likely increase their spending this year." Since buyers feel more confident about their positions at their jobs and are experiencing greater stability in life, they will be looking to improve their living situations by owning or upgrading. Additionally, with more millennials finding decent paying jobs and having the desire to move out of cities and into the suburbs, the buyer pool is really beginning to overflow
If you have been patiently waiting and sitting on the sideline, now is the time to get in the game! One thing that I can tell you is seller's markets do not last forever, so get the most from your home and SELL NOW! Feel free to reach out to me anytime if you are looking to buy or sell your home!
If you would like to know how much your home is worth and how I can help you save money if you decide to list it, drop by my website and leave your information. I will get back to you as quickly as possible. Thanks!!