Why Today’s Seller’s Market Is Good for Your Bottom Line

Thinking about selling your house and wondering if now’s a good time to do it? Here’s what you need to know. Even though the number of homes for sale has been growing this year, there still aren’t enough homes on the market for all the buyers who want to buy.So, what does that mean for you? To keep it simple, it means it’s still a seller’s market. Here’s how it works:A neutral market is when supply and demand is balanced. Basically, there are enough homes to meet buyer demand based on the current sales pace, and home prices hold fairly steady.A buyer’s market is when there are more homes for sale than there are buyers. When that happens, buyers have more negotiation power because sellers are willing to make compromises to close the deal. In a buyer’s market, sellers may have to do price cuts to re-ignite interest in their home, and prices may go down. But we haven’t seen this for years since there are so few homes available to buy.In a seller’s market, it’s just the opposite. When the supply of homes for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. That creates increased competition among purchasers which can lead to more bidding wars. And if buyers know they may be entering a bidding war, they’re going to do their best to submit a very attractive offer upfront. This could drive the final sale price of your house up.The graph below uses data from the National Association of Realtors to show just how deep into seller’s market territory we still are today: What Does This Mean for You?The market is still working in your favor. If you lean on an agent for advice on how to get your house list ready and how to price it competitively, it should get a lot of attention from eager buyers. That means you’ll likely get multiple offers and see your house sell quickly and for top dollar. As a recent article from Ramsey Solutions explains:“A seller’s market is when demand for homes is higher than the supply of homes. And that’s still the case right now. If you’re planning to sell your house, you can expect to sell it fairly quickly for close to your asking price—as long as your asking price is realistic for the current market.”Bottom LineToday’s housing market still favors sellers. If you’re ready to sell your house, connect with a local real estate advisor so you can start making your moves.

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Your Home Is a Powerful Investment

Going into 2023, there was a lot of talk about a possible recession that would cause the housing market to crash. Some in the media were even forecasting home prices would drop by as much as 10-20%—and that might have made you feel a bit unsure about buying a home.But here’s what actually happened: home prices went up more than usual. Brian D. Luke, Head of Commodities at S&P Dow Jones Indices, explains:“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”To put last year’s growth into context, the graph below uses data from Freddie Mac on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation: The big takeaway? Home prices almost always go up. As an article from Forbes says:“. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”In fact, since 1980, the only time home prices dropped was during the housing market crash (shown in red in the graph above). Fortunately, the market today isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand right now. On top of that, homeowners have a tremendous amount of equity, so they’re on much stronger footing than they were back then. That means there won’t be a wave of foreclosures that causes prices to fall.The fact that home values went up every single year except those four in red is why owning a home can be one of the smartest moves you can make. When you’re a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your net worth grows. So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home might make a lot of sense for you.Bottom LineHome prices almost always go up over time. That makes buying a home a smart move, if you’re ready and able. Connect with a local real estate agent to talk about your goals and what’s available in our area.

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What Mortgage Rate Do You Need To Move?

If you’ve been thinking about buying a home, mortgage rates are probably top of mind for you. They may even be why you’ve put your plans on hold for now. When rates climbed near 8% last year, some buyers found the numbers just didn’t make sense for their budget anymore. That may be the case for you too.Data from Bright MLS shows the top reason buyers delayed their plans to move is due to high mortgage rates (see graph below): David Childers, CEO at Keeping Current Matters, speaks to this statistic in the recent How’s The Market podcast:“Three quarters of buyers said ‘we’re out’ due to mortgage rates. Here’s what I know going forward. That will change in 2024.” That’s because mortgage rates have come down off their peak last October. And while there’s still day-to-day volatility in rates, the longer-term projections show rates should continue to drop this year, as long as inflation gets under control. Experts even say we could see rates below 6% by the end of 2024. And that threshold would be a gamechanger for a lot of buyers. As a recent article from Realtor.com says:“Buying a home is still desired and sought after, but many people are looking for mortgage rates to come down in order to achieve it. Four out of 10 Americans looking to buy a home in the next 12 months would consider it possible if rates drop below 6%.”While mortgage rates are nearly impossible to forecast, the optimism from the experts should give you insight into what’s ahead. If your plans were delayed, there’s light at the end of the tunnel again. That means it may be time to start thinking about your move. The best question you can ask yourself right now, is this:What number do I want to see rates hit before I’m ready to move? The exact percentage where you feel comfortable kicking off your search again is personal. Maybe it’s 6.5%. Maybe it’s 6.25%. Or maybe it’s once they drop below 6%.Once you have that number in mind, here’s what you do. Connect with a local real estate professional. They’ll help you stay informed on what’s happening. And when rates hit your target, they’ll be the first to let you know. Bottom Line If you’ve put your plans to move on hold because of where mortgage rates are, think about the number you want to see rates hit that would make you ready to re-enter the market. Once you have that number in mind, connect with a real estate professional so you have someone on your side to let you know when we get there.

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